In a BLR webinar titled "Global Rewards: Practical Approaches to Successful Multinational Rewards Strategies," Arturo Fisher and Patrick Gallagher outlined some of the basic total rewards program components common to most countries. They also outlined some high-level concerns to keep in mind.

Components of a Total Rewards Program

If we look at the key components of a total rewards program, we need to understand how each of the pieces fit together. How do they differ in different locations?

"Across the globe, the largest component in your total rewards program will be your cash compensation." Gallagher advised during the webinar. This can be a good thing, given that cash compensation is more controllable and manageable than other total rewards program components. The other total rewards program components are 1) perquisites and welfare and 2) benefits and employment conditions.

That is simple enough, but while crafting a total rewards package you’ll quickly discover that perquisites and welfare mean very different things in each country you may be working in. Each component within the context of each market is different. "Don’t fall into the US mindset – or what we call the US-perspective trap – of explaining perquisites. We cannot overemphasize how much time we spend in our practice correcting these issues after the fact." Gallagher emphasized. "Typical issues are re-explaining or re-designing housing allowances, meal tickets, company cars. These are things that are not prevalent in the United States but are beyond prevalent in foreign markets – they’re the standard."

Another important consideration is that global organizations only have control over some aspects of the total rewards package. "You will find that, from outside of the United States, there’s several countries where the legislation – it’s very strict, very rigorous, and dictates what you have to pay or not to pay as an employer." Fisher told us.

Everything from how base pay is calculated to what benefits an employer is legally obligated to provide may differ from one country to the next. Be sure to do your homework and not assume that the total rewards package you use for your US operations will translate into other markets.

For more information on crafting total rewards programs for your global organization, order the webinar recording. To register for a future webinar, visit http://catalog.blr.com/audio.

Arturo Fisher is a Principal at Laurus Strategies and the founder of Global Rewards Solutions. He has more than 21 years of experience in international HR, and has spent 16 years consulting with multinational organizations, helping them create, assess and manage HR policies and programs around the world.

Patrick Gallagher is also a Principal at Laurus Strategies. He has over 15 years’ experience in the employee benefits industry in areas ranging from the underwriting of group medical, life and disability programs; to the structuring of global insurance platforms (e.g. multinational pooling arrangements, global employee benefit captive solutions and global purchasing arrangements).