In a World of Pay

Article Evaluation 2- In a World of Pay

Meaghen Ryan

St. Petersburg College

The article "In a world of pay" by Bronwyn Fryer displays a fictional scenario about Typware, a German company, who is in the process of trying to recruit American Anna Provost for an executive marketing position to help with their globalization. The issue presented in this case lies within how Typware should compensate their expatriates and foreign recruitments. The HR department does not have a working salary system in place; there is no structure, order or policies on how to base salary and benefits. Typware's head of Human Resources has noticed many salary and benefit disparities among the managerial ranks, however Typwares' CEO is uninterested in implementing a salary system because their market is too competitive and his experience with such systems did not work. Anne is what this company needs to become a major competitor in the global software industry and the CEO is ready to give her what she wants in order to relocate her. This has caused some of the other employees to be upset and complain about the compensation being offered to her, they feel that it is unfair and are becoming resentful. The article provides feedback from four experts in the field of International Human Resources. In the following I am going to discuss two compensation strategy suggestions from one of those experts and how he says the answer to one question will guide the way that Typware compensates its employees along with defining their global strategy. I also want to discuss how sometimes these compensation packages can make the home country national feel that they are not as important or that their work is inferior to that of the expatriate.

According to George T. Milkovich, Professor of Human Resource Management at Cornell University and a founder of their Center for Advanced HR Studies, Typware needs a dose of strategic clarity (Fryer, 2003). What he means he means by that is Typwares' executives need to determine how it is that they tend to compete in a global environment, do they a) want to remain as a German company with a global reach or b) as a global company with a German touch? Once they as a company decide on the direction in which they should compete Milkovich says that they need to develop a compensation strategy that is aligned with their business strategy (Fryer, 2003).

Milkovich provided two compensation packages to choose from; 1) if their strategy was to compete as a German company in multiple international locations and 2) if they compete as a global company with a home country touch. The first package is based on the balance sheet approach with a little twist- the twist is to satisfy Typware's CEO's dislike of overly structured plans. According to our text book, Human Resource Management, the basic idea of a balance sheet is that each expatriate should enjoy the same standard of living as they did in their home country, it focuses on four expenses; income taxes, housing, goods and services and discretionary expenses. An estimate of each expense is done for the home and host country and the employer will pay the difference if the host country expense is higher (Dessler, 2011, pg. 645). The twist would be to modify the balance sheet to include a core package which meets Anne's financial expectations, which are based on the standards of pay and benefits of her home country, and a custom services package that would offer Anne flexibility to deal with unique circumstances.

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