Managing to set up international salary structures that have a
global reach but a local touch is fraught with difficulties! The idea behind it is to ensure consistency and avoid discrimination, control costs and, along with performance management techniques, allow managers to differentiate between the performance of individuals around the world who are at different levels or hold different positions within the organisation. However, even with a global grading scheme, each country is a different market, with different expectations and, therefore, you need to design a pay system that encompasses the differences of each…

To set up a scheme that will work for you, you first need to understand the difference between Global Salary Grades (a mechanism to classify positions/responsibilities) and Global Salary Structures (salary ranges within salary grades). But which do you need?

In the end you probably need both and design a system that comprises global salary grades that have local pay structures built in. The grades should allow you to create a robust, discrimination-free vehicle that gives consistency across the globe while the structures can be tailored to the local market incorporating local pay expectations . However, a word of caution: on paper it can all look fine… but, in reality, each country’s practices of in-kind benefits, bonuses, cash allowances and (dare I say) back-handers are all different!

For comprehensive advice, see “Global Salary Grades or Global Salary Structure” and “Ten Steps For Building A Salary Structure.” by Warren Heaps

Tags: global salary grades, global salary structures, international pay scales

This entry was posted on Wednesday, March 16th, 2011 at 3:03 pm and is filed under General, international business . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.