Global Compensation Strategy Examples

How do international companies provide payment to their employees around the globe? What helps them attract talent in any country of the world? The secret is global compensation strategy. Read this article to learn more about it!

🔝 Top Global Compensation Strategy Examples

  1. Compensation Effectiveness Evaluation

🌎 What Is Global Compensation Strategy?

The definition of a global compensation strategy is as follows: it’s a plan for providing a fair and competitive salary for a company’s employees worldwide. It should align with the organization’s short- and long-term goals and attract, keep, and inspire high-performing people.

What Is a Global Compensation Specialist?

Global compensation specialists assist with the company’s global compensation program. They analyze trends, conduct studies, keep abreast of new legislation, and develop necessary strategies and tools. These specialists also offer advice and counseling about compensation and benefits.

💸 What Are the Objectives of Global Compensation?

Compensation is an employee’s payment in exchange for their service to the company. The objectives of the global compensation strategy are as follows: 

To attract and hire talent The strategy is centered on bringing in the best potential talent for every position and providing the company with skilled workers. Its implementation leads to seamless business workflow and improved productivity. 
To boost morale Compensation makes up for a lot of what could be causing distress among employees. It motivates them to do their best and contribute to the company. 
To improve organizational performance When employees are motivated at all times, it is natural that the business will bloom and organizational performance will continue to improve.
To protect employees Employees cannot perform well for fear of being fired after any wrong move. This strategy provides them with a security blanket that enhances motivation and reduces stress.  

📊 How to Design a Global Compensation System

Managing global compensation is challenging, meaning you should master the fundamentals to manage total rewards effectively across various countries. In addition to comparing salaries for similar roles and seniority levels, employers must ensure that the basic pay reflects the candidate’s access to local currency.

Here’s what’s required to develop an excellent global compensation system:

  • Consider the average cost of living in each country where the company hires people.
  • Determine the proper financial value of bonuses or supplementary allowances per team member. This will facilitate staff recruitment and retention while helping develop a rewarding and competitive compensation program.
  • Include any incentives related to the company’s rewards programs after determining base pay. Keep in mind that not every employee will value benefits equally due to various issues and factors affecting their decisions.

✨ Global Compensation Strategy Examples

Now, let’s examine a couple of successful global compensation strategy examples:

Johnson and Johnson Global Compensation Strategy

With their newly established global compensation strategy, Johnson and Johnson can better plan succession, effectively integrate acquired companies, present a more unified front at graduate recruiting fairs, and develop similar career models across all of their businesses. This multinational corporation succeeded in establishing a standardized worldwide compensation strategy to improve eligibility and chances for talent abroad. Additionally, it aims to match itself with regional market norms better.

Walmart Global Compensation Strategy

At Walmart, the global compensation strategy is based on several principles. The most important one is local relevance, which means adjusting compensation in accordance with each country’s reward framework. They also implemented the “pay for performance” principle to drive growth effectively.

Other examples of companies with great global compensation strategies include:

We hope these examples helped you learn more about the global compensation strategy in the international market!

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BusinessEssay. "Global Compensation Strategy Examples." January 8, 2023.