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A Reward in the U.S. May Not Be a Reward Overseas

June 29, 2005
Related Topics: Managing International Operations, Recognition, Featured Article, Compensation, Benefits
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As U.S.-based multinational companies expand and the use of incentives grows in Europe, both sides of the pond are learning a thing or two about recognition.

    The Dublin-based incentives company Globoforce recently opened its U.S. operations in Westborough, Massachusetts, outside of Boston. It found that while it had to educate European companies on why they should consider incentive awards, it also had to educate American companies about why they need to put equivalent effort into their incentives for Europeans, Globoforce CEO Eric Mosley says.

    American companies, for example, commonly have their foreign-based employees choose gifts from a catalog or arrange for stellar performers to automatically receive electronic devices like CD players or television sets. The company goes through the expense of packaging, mailing and dealing with tariffs and complicated forms to send an electronic device abroad to a deserving employee. These are pulled from the same warehouse shelf as the awards for U.S.-based employees. This is a major blunder, given differing electrical currents among some continents.

    The result is often an unwrapped box on the receiving end that figuratively shouts, "Management cannot bother with catering to your needs!" All that does is alienate the employee who’s supposed to be receiving a reward. "The recipient feels like ‘I’ve done a lot of great work, but this feels like a slap in the face because they don’t understand my culture,’ " Mosley says.

    Having served the Irish and other European operations of clients such as Intel, Avnet, Reuters and British Telecom since its 1999 inception, Globoforce has begun picking up U.S. business. Companies are streamlining their awards and recognition programs so that "wherever they have employees, the employees are all recognized in the same degree," Mosley says. "It creates harmony across the company."

    When companies do reward--regardless of where their home base is-- they tend to do so for the same reasons: increased productivity, timely completion of projects or hitting sales goals.

    Globoforce is one of a handful of providers working across borders to help American companies realize that even if European employee aren’t as accustomed to the concept of incentives, that’s no reason to reward them at a lesser rate than they would their American employees. The important objective is to understand their different needs, Mosley says.

    For example, redemptions in the retail culture differ from one country to the next, he says. The U.S. has a department store culture, and giving gift certificates to big retail chains and restaurants is popular. Italians may prefer a small fashion boutique; Germans a sports store. In China and other parts of Asia, gift certificates are not prevalent, and recipients often appreciate a tangible gift, Mosley says.

    Be aware, however, of the monetary value placed on some awards. Because of differences in cost of living, a night on the town in the U.S. could equate to buying a car in India. Therefore, rewards should be locally adjusted for the actual cost of living in the particular country. Says Mosley, "It is not fair when rewarding the same behavior gives someone the chance to buy a car and someone else lunch."

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