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.