Pay-for-Performance Advances in Asia and Latin America
Today’s successful global companies are increasing their use of performance-based pay and are also moving to customize incentive pay packages by region, according to the Towers Perrin 2005 – 2006 Worldwide Total Remuneration study. The study highlights compensation and benefit practices in 26 key locations around the world.
“Based on the success of performance pay in North America and Europe’s developed economies, Asian and Latin American companies are now instituting similar practices that tie employee compensation to business results,” said Martine Ferland, principal and head of Towers Perrin’s HR Services business Global Consulting Group.
The study also found that multinational companies are deriving advantages by applying a global framework to their pay and benefit programs while adapting actual mix and level to regional standards. This kind of approach can help companies cut costs and bring more consistency to their reward practices worldwide, at the same time remaining competitive by varying performance pay and other types of remuneration by country and region based on regulatory and cultural differences.
“As companies continue to shift the pay mix in favor of performance pay, it implies that an HR strategy should -- at a minimum -- articulate the company’s desired pay mix and competitive positioning against the market. It should also state whether target levels will be set locally, regionally or at a global level, and identify how performance will be measured,” said Ferland.
See full Press Release.
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