Multinational companies have made great strides in establishing compensation and performance management systems that cover all employees. But the are limits due to international labor laws.
By Fay Hansen Comments 0 | Recommend 0
ultinationals have made huge strides in establishing global compensation and
performance management systems with similar salary structures and evaluation
criteria for all employees. "It is bad human resources policy to discriminate
among similarly situated employees based on arbitrary factors, and in today’s
global workplace, ‘home country’ increasingly is becoming an arbitrary factor,"
says Donald C. Dowling Jr., international labor and employment counsel for
Proskauer Rose in New York City.
The collaborative nature of knowledge work makes it even more important to
establish consistent systems. "With projects and work teams now spanning
international borders, it makes less sense to apply different policies and
practices for employees who function as co-workers even through they may work in
different countries," Dowling notes.
"Obviously, there are differences in the labor markets and employment laws, so
there will always be major differences in the amounts that employees are paid
and the benefits they receive, but the trend is toward harmonizing plans unless
there is a business case for using different plans," Dowling says. "Large
multinationals are far along in the process."
Still, detailed labor laws and regulations abroad set limits on harmonization.
Dowling warns that U.S.-based workforce management executives tend to
underestimate the complexity of foreign labor laws. "U.S. laws in other
areas—for example, environmental laws—are usually far more complex than in other
countries," he says. "But with labor law, the situation flips. Labor laws abroad
are far more complex than in the United States."
Ongoing globalization and the at
tempt to establish global compensation and
performance management systems require a new multijurisdictional approach to
labor law that transcends reliance on local counsel in each corporate location.
The largest U.S.-based multinationals have developed in-house international HR
legal expertise, according to Dowling. "The same talent is now evolving in law
firms," he says. "These multi-jurisdiction practitioners can work with a network
of local attorneys to resolve both international and local legal issues."
LABOR-LAW CLIMATES
Main indexes for measuring the flexibility of labor laws, with higher
values indicating greater rigidity on a scale of 0 to 100. (The greater
the amount of regulation, the higher degree of difficulty of the
following tasks.)
Difficulty of hiring
Difficulty of
changing work hours
Difficulty of firing
Firing costs
(in weeks of pay)
U.S.
0
0
10
8
Canada
11
0
0
28
Mexico
67
60
90
83
Brazil
67
80
70
165
U.K.
11
40
10
25
Germany
44
80
40
80
Russian
Federation
0
60
20
17
Japan
33
40
0
12
India
11
40
40
90
S. Korea
33
20
90
79
Note:
Based on full-time nonunion (unless mandatory), nonexecutive male who is
not a member of a protected minority group and who works at a
manufacturing firm with 200 employees.
Source:
World Bank
Workforce Management, April 10, 2006, p. 23
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ultinationals have made huge strides in establishing global compensation and
performance management systems with similar salary structures and evaluation
criteria for all employees. "It is bad human resources policy to discriminate
among similarly situated employees based on arbitrary factors, and in today’s
global workplace, ‘home country’ increasingly is becoming an arbitrary factor,"
says Donald C. Dowling Jr., international labor and employment counsel for
Proskauer Rose in New York City. 
