Why is it important for MNCs to develop compensation and benefits policies that result in fair processes and outcomes? (APA Format 400 words)
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Joseph Santos discussion 4
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Joseph Santos
– Thursday, 10 February 2022, 5:44 PM
Why is it important for MNCs to develop compensation and benefits policies that result in fair processes and outcomes?
Discussion
Four objectives ensure that compensation and benefits policies result in fair processes and outcomes. They need to be consistent with business strategies, maximize recruitment and retention efforts, be cost-effective, and create a fair process and result. The first objective needs to align with the business objectives and character. The second objective is to make sure that MNC’s hire the right people for the right job (Reiche et al., 2019). For example, employees who want to transfer to work on an assignment in a different country make sure they know the other country’s cultural norms (Reiche et al., 2019). The third objective is to make sure they are cost-effective, ensuring that employees receive incentives or premiums for foreign services, reimbursements for certain costs, and tax equalization (Reiche et al., 2019).
The main objective that I will discuss is to result in a fair process and outcome. This needs to be fair for everyone working in the company because they need to know that they matter and that their families are taken care of. Most MNC’s design programs are treated relatively fairly regarding whatever assignment they are working on (Reiche et al., 2019). The main thing when it comes to making sure the compensation and benefits are fair and ensuring that the employees can voice their view argument during a procedure and help out on the actual conclusion itself (Reiche et al., 2019). Suppose these three things happen, and there is a fair process. Three benefits will come out of that case: higher job satisfaction, better performance on their overseas assignments, and the likelihood to remain repatriated (Reiche et al., 2019). All of these three things will happen because the employees are happy and feel that they are taken care of when they are doing an assignment for a company.
Conclusion
In conclusion, these four objectives are all essential to ensure that the total rewards policies make up the international total rewards work for the organization and employees. The main objective that is important is to make sure that it is fair and has a positive process and outcome for everyone involved. The reason is that this will help keep the employees wanting to work and stay within the company. For example, at my company, they offer a 401k to all of its employees and will work with each employee to see how much they want to match it individually so that it is fair for each employee who wants to contribute to their 401k. Another example is at my company Cintas every year; each employee gets a performance review. This performance review is for managers to evaluate the employee’s contribution to the organization and see what pay increase they will receive. Every employee gets the same boost per year based on the managers’ system to make it fair for each employee.
References
Reiche, Sebastian, Harzing, Anne-Wil & Tenzer Helene. (2019). “International Human Resource Management” SAGE. 2019 483-492
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Isel Castillo – Thursday, 10 February 2022, 10:06 PM
It is crucial for multinational companies to develop compensation and benefits policies to ensure employees a stable and fair income and to motivate them to continue to stay in the same company increasing their skills while staying loyal to the company. Bonuses and yearly pay boosts aid the company to retain employees and to have better opportunities and pay than others. At times companies increase worker pay, to engage employees and to somewhat convince them to stay in the company. If employees have benefits, they know that they are able to take off days that they need without harming their pay. Thus, it is crucial for MNC to also compensate based on experience, growth, and time that employees have stayed. The longer employees stay in a company, the more benefits they are able to acquire such as higher positions, higher salaries, more paid days-off, and even bonuses for staying a certain amount of time within the company. In addition employees feel welcomed and appreciated when their work is noticed; furthermore, they work extra hours and put in more effort when they see personal growth and recognition from their supervisors and managers.
Researchers emphasize the economic perspective of value in Return on Investment (ROI) for expatriates because it intertwines with financial and non-financial losses and gains; moreover, these values boost the accuracy and efficiency of the calculation meaning that leading standards of value such as building global leadership artistry and implementing new corporate structures in subsidiary offices are interconnected in ROI. Once these leadership values are built in the beginning, and in the middle of the expatriate’s assignment, performance results are simpler to be predicted and controlled. MNC are able to not only maintain expatriates for a longer period of time with fair compensations and policies that protect them and ensure secure employment, but to experience return on investment with expatriate employees who become leaders, entrepreneurs, and have deeper knowledge about their field and the host country they resided in (McNulty and Tharenou, 2004).
When MNC are able to compensate employees through fair processes and outcomes, employees feel safe and noticed at work. It is important for companies to consider all of their employees and what they can bring to the table. Even when it comes to the janitorial team, multinational companies know that it is important to keep members who take their job seriously and who give their best because if employees are mistreated they can file complaints against the company and also lose employees instead of retaining them. Vacancies damage the team as a whole since team members have to cover for other employees and not having fair processes and outcomes, changes the atmosphere of the company to a place where employees do not wish to work at.
Overall, fair processes and outcomes allow employees to feel respected and taken into account because they know that the company is not only a place to work to make a living, but a place that cares about their needs and compensates them fairly for their hard work and commitment to the company. Managers and company owners ought to make wise decisions to know how to grasp the interest of their employees and by providing bonuses, paid vacations, an economic insurance, and incentives, they are able to retain employees.
McNulty, Y. M., & Tharenou, P. (2004). Expatriate Return on Investment. International Studies of Management & Organization, 34(3), 68–95. https://doi.org/10.1080/00208825.2004.11043710
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