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Sharing the Burden of College Tuition

August 1, 1996
Related Topics: Benefit Design and Communication, Expatriate Management, Featured Article
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Cheers, tears, fireworks! The reception among our employees couldn't be better," wrote one Brazilian manager of AMP Incorporated's global scholarship program for employees' children. Similar sentiments worldwide greeted the announcement of the first recipients of AMP Incorporated scholarships.

Many companies offer dependent scholarships in their home operating countries. But AMP Incorporated took on a whole new challenge: making a scholarship program available to children of employees in all of the company's 47 operating countries.

The program prepares AMP Incorporated for the future.
Conceived in 1992 and fully implemented in 1995, the initiative derived from several motives. Certainly, simple altruism provided one justification. AMP Incorporated, based in Harrisburg, Pennsylvania, takes pride in its strong history of valuing employees and their families.

But the return on investment to the company's bottom line was also a major force in the decision to offer these competitive scholarships. AMP Incorporated—a Fortune 500 company and the world's largest manufacturer of electrical and electronic connectors and interconnection systems—was looking toward the future on two counts. First was the need for a skilled global workforce five, 10 and 15 years down the road. And what better way to ensure that than to assist young people in obtaining a quality, higher-level education?

The second need was to attract and retain the best people in the short term. AMP Incorporated was undertaking ambitious succession-planning and capacity-planning efforts. Part of these efforts was global leadership development: AMP Incorporated wanted to attract leaders worldwide and retain them as they advanced in the company. The corporation envisioned the AMP Scholars Program as one important element in the overall strategy to attract and retain highly valued employees.

The effort truly was a combination of assisting employees while helping the company build a strong future workforce. Board Chairman James E. Marley, a longtime advocate of education at AMP Incorporated, says of the program he initiated: "I can think of no better way of touching the hearts of our employees and enriching the company's human resources base than through providing opportunities to expand the minds of employees' children."

Once the company decided to go forth with the program, planning for implementation began. In general, when an organization wants to start up a new employee program, HR conducts a serious round of benchmarking. But in 1992, modeling the proposed program on successful precursors at other companies wasn't an option. The proposed scholarship program would enter relatively untraveled ground. A feasibility study showed corporate America had little experience with funding dependent scholarships on a global basis.

The study—which covered the logistics of launching a global scholarship program—brought to light AMP Incorporated's biggest challenge: to define universal criteria that would be applicable in each of the 47 countries in which AMP Incorporated bases employees—from Mexico to China to Denmark to Turkey. But not only did the criteria have to be universal, they had to incorporate sensitivity to the broad educational and cultural diversity that is a major asset of transnational commerce. "How can we expect to serve global markets and global customers, or to produce global products," asked AMP Incorporated CEO and President William J. Hudson Jr. as the program design evolved, "if we find it impossible to extend comparable educational benefits to the children of all employees in all countries?"

A global scholarship program can be surprisingly standardized in structure.
Although the study brought to light the challenges, it also demonstrated AMP Incorporated could overcome potential problems through careful program design and planning. In 1994, with the U.S. pilot program, AMP Incorporated did just that. The company tested a set of preliminary procedures and found they could be used in all 47 countries with little adjustment.

Customized features of the AMP Scholars Program include:

  • Scholarship administration.
    AMP Incorporated awards 30 scholarships annually. To avoid the appearance or suspicion of bias in selecting winners, AMP Incorporated chose the nonprofit Citizens' Scholarship Foundation of America (CSFA), based in St. Peter, Minnesota, as program administrator. CSFA provides advice on legal requirements governing corporate scholarship programs and is flexible enough to allow companies to design criteria and procedures uniquely suited to specific business needs.
  • Scholarship amount.
    AMP Incorporated chose to feature a fixed amount—$3,000 per year per student—based solely on each applicant's merit rather than on family need. Standardized awards enable the company to avoid having to compensate for widely varying educational costs and standards of living worldwide. (For instance, in many countries, the national government provides free tuition for participants in post-secondary education.) Investigation showed the $3,000 figure—applicable to tuition and fees, books, housing and other direct educational expenses—to be a reasonable amount. Program materials inform recipients they're liable for any related taxes under their local or national governments.
  • Selection criteria.
    The program administrator selects winners of these competitive awards on the basis of a fairly complex formula. Included are such factors as academic record, including a gradepoint average equivalent to 3.0 or higher on a 4.0-point scale; potential to succeed; leadership and participation in school and community activities; honors; work experience; a brief statement of educational and career goals; and an outside assessment usually supplied by a guidance counselor or teacher. AMP Incorporated's role in selecting scholarship recipients is limited to certifying that a parent of each candidate selected by CSFA has been a full-time AMP Incorporated employee for at least one year.
  • Student eligibility.
    AMP Incorporated limits eligibility to dependent children (natural or legally adopted children or stepchildren living in the employee's household or primarily supported by the employee) up to the age of 23 who are beginning full-time undergraduate study anywhere in the world. Many corporations restrict recipients' field of study to certain majors with direct bearing on the companies' business interests.

    After careful consideration, AMP Incorporated determined not to steer employee dependents into their parents' footsteps, but rather to make the scholarships available to students in all disciplines. AMP Incorporated leaders believed that limiting applicable courses of study would hinder the effort to foster leadership excellence around the globe. "We want as many employees and their children as possible to be eligible to compete for these scholarships," says Philip G. Guarneschelli, corporate vice president for global human resources. "The more open the requirements, the better."
  • Institutional eligibility.
    To prevent potential abuses, the program administrator ensures that the winners' institutions have earned the proper accreditation. The program is open to students in both two- and four-year colleges, universities and technical schools.
  • Renewability.
    A surprisingly large number of corporate scholarships given to employee dependents are nonrenewable. AMP Incorporated anticipated that such a system could result in recipients having to leave their institutions when funds were depleted after the first year—jeopardizing the investment already made in these outstanding performers. So AMP Incorporated decided to make the scholarships renewable for up to three additional years, or four additional years for students in five-year programs.

    As each school year ends, the program administrator requests a transcript. Renewals are automatic as long as the student exhibits satisfactory academic performance (as defined by the institution) and the parent continues full-time AMP Incorporated employment. Students can transfer from two- to four-year institutions, or change degree programs, without penalty. They can even suspend their studies for a year if CSFA and the institution agree that an interruption is merited by employment need, the fulfillment of family responsibilities, medical reasons or a religious mission.

Program administration acknowledges global diversity.
Once scholarship-program parameters were established, AMP Incorporated began the process of putting them into words and creating operational guidelines. The two major challenges to contend with for this step of the process: language and culture.

For example, employees in each country where AMP Incorporated operates were to receive an application brochure outlining the program. For non-English-speaking operations, an HR expert in each country received preliminary drafts of the brochure in both English and their country's language. These bilingual coordinators then verified the accuracy and usability of these drafts from their cultural and educational contexts.

Even the English-language versions of these materials required customization. Linguistic and cultural variations among English-speaking countries mandated four English-language versions—one for Great Britain, Singapore, Australia, and of course, the United States.

For instance, grading systems, school types and levels and means of indicating class rank vary throughout the English-speaking world. In the United States, the program is open to "high-school graduates who will be enrolled for the first time in a full-time course of study at an accredited two- or four-year college, university or vocational-technical school." In Great Britain, the AMP Scholars "Programme" is open to "students with GCE, A Levels, Ordinary National Certificates or Diplomas who will be enrolled for the first time in a full-time course of study in a three- or four-year degree course or a two-year HND course." In Singapore, the U.S. "grade-point average of 3.0 or higher on a 4.0 scale" translates into "good O- or A-level results."

In all, 15 versions of the program brochure were necessary to convey the program parameters to the more than 40,000 AMP Incorporated employees worldwide.

Coordinators help make the program work.
Then came administration. The AMP Scholars Program is coordinated through the AMP Global Human Resource Development unit located at the company's Pennsylvania headquarters. This office produces the program's printed materials—and manages the efforts of a worldwide cadre of program coordinators. These coordinators are usually HR professionals, selected by the general manager for each country.

Employees receive the program brochure either directly in the mail or through the coordinators, depending on the communication process in each country. The program coordinators provide onsite assistance as necessary. They're the contact people for any questions—and all applications go first to each country's coordinator, who then sends them directly to CSFA.

Coordinators receive priority access to the program office for assistance with interpretation of criteria and procedures. The central office in turn arms the professionals with yearly updates, presented in a Q&A format. As coordinators report questions stemming from cultural differences, these issues are incorporated into the Q&A briefings. For instance, one coordinator reflected her country's cultural tendency to limit college attendance to one child per family when she asked: "How many children from the same family are eligible to apply?" This is an inquiry an American—accustomed to any number of a family's children attending college—probably wouldn't make. But the questions may also be universal. "If an employee dies or is laid off, does that terminate the scholarship?" (The answer is no.)

Cooperation between the coordinators and the central office has considerably smoothed program administration.

The program earns applause from around the world.
During each of the first two years of the program, an average of 160 applicants applied for the 30 available awards. Students submit application materials from January 1 through March 15 and are informed of their acceptance in writing by CSFA by the middle of May.

The sophisticated formula used to assess applications has resulted in a diverse group of winners. In addition to majoring in various engineering disciplines, AMP Scholars are studying pharmacy, pre-law and pre-medicine, economics, languages, biology, international relations, psychology, communications, creative writing and liberal arts. Slightly more than 50% of them are female, and class ranks range from the 88th to the 99th percentile. Geographically, they represent 17 countries. What they have in common is that they are intelligent, well-rounded, interesting young people with bright prospects of academic and career success.

Winners are featured in company magazines and newsletters, and in local newspaper stories throughout the world. In company facilities worldwide, a colorful poster prepared in the local language bears the faces and names of the AMP Scholars along with a congratulatory message from Board Chairman James E. Marley and CEO and President William J. Hudson Jr. Copies of these posters also hang in the homes and dormitories of new AMP Scholars from Argentina to Australia.

Leonard I. Hill Jr., vice president for global succession and organization planning, reflects with pride on the contributions the scholarships have made to awareness of the corporation's HR planning initiatives and to employee pride worldwide: "It's one thing to talk about enhancing employee appreciation and to plan for 21st-century readiness," he says. "It's quite another to receive news that some of these changes bring tears and cheers of joy to our employees all over the world."

Personnel Journal, August 1996, Vol. 75, No. 8, pp. 89-93.

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