Author:
Warren Heaps – Birches Group LLC
Many companies use salary scales together with salary grades to manage their compensation programs globally. There are many advantages to doing so, including cost management, positive employee relations and transparency which enables managers to be directly accountable for pay decisions.
In developing markets, creating salary scales is more challenging than in countries with more stable economic conditions. Developing country markets are volatile and often fluctuate from year to year based on a combination of factors. Cost of labor (supply and demand), tax and labor law changes, general economic conditions (such as inflation), business growth and expansion, as well as unplanned events such as natural disasters, civil unrest and the like are all in the mix.
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