WAW at Work

Pay Programs Need Consistency at All Levels, Executives Say

Tuesday, April 30, 2013

To ensure success, pay programs should be applied consistently on a global basis, human resources executives said April 30 at the2013 WorldatWork  Total Rewards Conference in Philadelphia.

The executives, who participated in a panel discussion, were from three large global companies that sought to control compensation costs and increase employee satisfaction by applying consistent pay practices at operations in the United States and abroad.

H.J. Heinz Co., which has made dozens of acquisitions worldwide over its 140-year history, has made an effort to set the same pay practices in each location, said Randolph W. Keuch, vice president of total rewards at Heinz.

“We thrive on being more consistent and that has helped us integrate businesses over the years, Keuch said. With locations in 170 countries, Heinz categorized each job and fit it into a broad band. Each band had a salary range, and total pay would match the amount set within a band, he said.

General Mills Inc. is on the third year of ensuring that its pay practices were applied consistently throughout operations worldwide, said  Tracy J.O. Kofski, vice president of compensation and benefits at the company. General Mills recently completed a global project that set every job within a level, regardless of location. Similar to Heinz, each job had a salary of a certain range, depending on the level.

Mondelez International Inc., a snack food manufacturing company,  has operations in 170 countries worldwide and revenue of $35 billion. The company previously was known as Kraft Food Group Inc. Internal equity in compensation is a major philosophy of Mondelez,  said David Pendleton, a senior vice president of compensation, benefits and human resources  systems at Mondelez.

“If we didn’t have our pay programs be consistent throughout the world, we’d need a larger HR staff and it would be more difficult to manage,” Pendleton said.

While the companies made distinction for regional locations,  total pay must fall within the level set for the position, the executives said. For example, the salary for a job would be higher if an employee lived in New York rather than  Omaha, but the pay level still would be with the pay band, Keuch said. If an employee is near the top of a pay range, a manager would be encouraged to give a lump-sum payment in lieu of a pay raise, he said.

In addition to applying pay practices consistently, communication also is important, the executives said. Managers who cannot comprehend how the pay program works would be unable to apply its attributes consistently, Kofski said.

 

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