4 Reasons Why Managing Global Compensation Is So Complex

Do you manage Enterprise Compensation in a large and global organization? If so, this topic is for you. If you are responsible for managing merit increases, bonus plans, long-term incentives, or non-cash rewards in a complex, international organization, you probably face at least one of the following challenges:

The “multi” factor

Even if your compensation schemas or merit increase policies are relatively simple, a large international organization introduces a lot of complexity. Different currencies, languages, companies, time zones, and local reward cultures can add great complexity to your compensation processes. Nevertheless, you still need to have consistency throughout all processes.

Balancing global vs. local

Finding a balance between a global view and local execution is always a challenge. Bonus plans, merit increase policies and benefits need to be consistent throughout your global organization. On the other hand, local labor contracts and compensation practices, or availability of talent in different regions, may require some flexibility and adaptability. Not an easy compromise.

Driving an extended process

Do you need to make sure, for example, that 5,000 managers in 20 countries will assign consistent targets to their teams for STI, by the very same day?  Controlling the process and meeting timelines in a global organization is a real challenge. Communication in 12 time zones and 20 languages can be a problem unto itself.

Optimizing your budget

Managing compensation without any budget constraints would be an easy task. Unfortunately, not only do you have a budget, but you will probably need to create countless simulation scenarios to define what the optimal allocation of your budget is throughout your different regions, divisions, and business units, and this may require many different bonus pools.

beqom can help you

beqom is a Total Compensation software platform. You can use it to manage merit increases, bonuses, long-term incentives, and non-cash rewards—even sales incentive compensation—in a global organization like yours.

Let’s go back to the 4 challenges:

1. Managing the “multi factor” with beqom: our software platform is based on a multi company, multi currency, multi language environment.  With beqom, you are able to manage all processes both in the local and consolidation currencies. Moreover, you are not forced to work in organizational silos like companies or business units: you can create clusters, groups of employees throughout your global organization. Examples of global populations can be: top talents, high potentials, or expatriates.
2. Global and local with beqom: you have features allowing you to balance the required global consistency with the adaptability necessary to manage country specific needs. With beqom, you can define a global process and then adapt it by region or organization. An example can be a country specific merit matrix in each country in the merit increase process. Another example from one of our customers: in call centers in Europe, some countries do not allow individual compensation of the operators; bonuses have to be team based in those countries, while remaining individually focused in others. beqom is able to manage individual bonus schemas and team bonus schemas within the same process.
3. Driving an extended process with beqom: meeting timelines and having effective communication are key in a global organization. beqom is able to design and manage different compensation statements, data entry, and approval forms to simplify communication of: target assignment, employee evaluation, merit increases, benefit or reward assignment.  Our workflow features will save you hours of work overseeing the status of your compensation processes and sending proactive alerts to synchronize your organization. Mobile is in our DNA, since our compensation software is available on any mobile device or tablet.
4. Optimizing your budget with beqom: upon creating a new budget, beqom simulation features will help you calculate the projected impact, for example on merit increase or bonus pool assignment.  You can run what-if scenarios to simulate the expected results by country, division, or any cluster of employees that is relevant in your compensation process. An easy graphical dashboard approach will give you the big picture of where you are vs. your budget.

Contact beqom today to speak to one of our compensation experts about your needs for managing global compensation.

Editor's note: This article first appeared in 2014 and has been one consistently of our most popular—and it's every bit as relevant today!