What are some best practices for leveling compensation across different locations and currencies?

I think this is definitely a first step in the design and what I think is useful is to give space for everyone to contribute to the solution. It's wise to setup working groups, involving the compensation planners such as board, directors and senior managers. Not only hierarchical structures but also transversal ones such as DEI, Talent Development teams, etc. It's also possible to integrate feedback from colleagues via surveys or group brainstorming. The big pillars of a compensation scheme, including transparency, fairness and clarity will only be understood if they can be traced back to the things that were identified as concerns. No solution can replace or substitute for how it potentially responds to this initial discussion.

I think compensation philosophy also will answer the question "How competitive do you want to be". Some markets are really hot and if you want to compete for the best talent and retain it, you need to include this in your compensation philosophy.

In a leveling process for compensation, it is essential to have a clear compensation philosophy and principles in place as this will help answer any questions around compensation structures. One can start to define a compensation philosophy by through identifying pillars such as equity, competitiveness, transparency, adaptation from global to local and lastly how it aligns with the organization's goals / values. On the compensation principles, there a few things to keep in mind always. This can be regularly reviewing market analysis, currency exchange rates, local regulations, skills and experience and depending on the organization purchasing power parity.

A well-defined compensation philosophy and principles are essential for creating a fair and competitive pay structure within an organization. Key aspects to address include competitive pay, pay for performance, internal equity, external competitiveness, diversity and inclusion, and alignment with culture and employer brand. Benchmarking against industry standards and local market rates, rewarding performance, ensuring equal pay, and addressing pay disparities are crucial. Effectively communicating these principles to employees and stakeholders promotes trust, understanding, and commitment to equitable pay. Regularly reviewing and updating your compensation philosophy ensures a consistent and competitive approach to compensation management.

O primeiro passo será sempre definir como e quem recompensar mais, ou menos. Quando n?o se sabe o caminho, qualquer lugar serve. Ou seja, se n?o há uma filosofia de remunera??o clara entre aqueles que definir?o a estrutura, qualquer prática vai parecer válida e encaixada à organiza??o. O que n?o é verdade, pois cada empresa tem as suas especificidades até mesmo na hora de reconhecer e recompensar suas pessoas. Vejam, é primordial que se crie um comitê de pessoas para colocar no papel a estratégia que se quer seguir para aquele período (sim, isso pode mudar de tempos em tempos). A partir daí é que se pesquisa o mercado, se identificam as formas de remunerar, as leis e diretrizes de cada localidade e outros fatores que compor?o a estrutura.

In my experience, I always follow such tips in alignment, redesign, or implementation of a leveling framework: 1. Easy to understand by all people in the company - from Leadership to employees; 2. Easy to convert and use in gathering market data and using market data surveys; 3. Gives flexibility and scalable when company growth.

Begin by looking at the understanding for your organization's needs. This can be viewed by size, structure, industry and geographic presence. Next, identify appearance factors such as number of employees, diversity of roles and intricacy of the organization. Another points to consider are for example research any existing frameworks internally and externally. Further, it is useful to determine your criteria or factors that will influence the leveling of positions within your organization. Other points to highlight and remember are to develop a job evaluation process, consider market data, establish consistency and lastly test then refine. All of these points will need to be documented and communicated to the respective stakeholders.

Point-factor leveling offers a customizable, objective, and comprehensive approach but can be complex, subjective, and rigid. Job family leveling provides simplicity, clear career progression, and streamlined comparisons, but may lack flexibility, involve subjectivity, and result in inconsistencies. Market-based leveling ensures competitiveness, real-time relevance, and external equity, but is susceptible to market volatility, may overlook internal equity, and depends on data quality. Each framework has its own advantages and disadvantages, so organizations should carefully consider which approach best aligns with their unique needs and objectives.

A boa e velha metodologia de pontos atende todo e qualquer segmento. Mas para que isso ocorra de forma saudável, é preciso estar claro quais ser?o os fatores de avalia??o adotados pela empresa. Isso muda bastante entre companhias de ramos diferentes e até mesmo entre empresas cujos negócios s?o parecidos. Também é ideal pensar em fatores estratégicos e que contribuam para a carreira das pessoas, como controle de budget, lideran?a técnica ou indireta de pessoas, responsabilidade na tomada de decis?es, entre outros. Quando falamos em atua??o em diversos países, a metodologia de pontos ajuda pela sua universalidade. Podemos ter nomenclaturas diferentes, moedas diferentes, práticas econ?micas diferentes, mas a pontua??o é universal.

Select a leveling framework that aligns with your organization's structure and goals. This may involve job evaluation methods, such as point factor analysis or market pricing. Establish clear criteria for job levels and ensure consistency in their application across different locations.

This step requires first to define one's objectives on the relevant markets and positions to compare against. Matching your organization's positions with similar roles internally then externally can help you to reduce sporadic data or outliers. Using reliable quality checking data sources from global salary survey providers is a step of assurance. In addition using multiple data points can from outside the survey providers such as new hire candidate data ensures accuracy and reliability. Naturally, consider to adjust for differences for company size, industry, years of experience, education level and location.

Market research and benchmarking are essential, but over-reliance on external data may drive up salaries without improving talent acquisition or retention. Balancing external competitiveness and internal equity is crucial. Since COVID, remote work has blurred geographical boundaries, prompting reconsideration of location-based compensation. Organizations may need more flexible, skill-based pay structures. The pandemic also shifted industry priorities, affecting compensation trends and talent demand. Adapting market research and benchmarking processes to accommodate these changes is vital, while maintaining a focus on internal equity.

Necessariamente a empresa vai precisar ir ao mercado para conhecer as práticas do seu setor. Na verdade, ela vai precisar contratar uma consultoria que traga esses dados nas suas m?os. Existem diversas metodologias, sistemas, siglas. é importante ter pessoas capacitadas tecnicamente para interpretar os dados e traduzir em uma linguagem que os tomadores de decis?o entendam. Aqui é importante buscar por consultorias que atendam alguns requisitos, como ter uma boa base de informa??es do segmento da empresa, dados de outros países e informa??es o mais completas possíveis (fixo, variável de curto e longo prazo, benefícios). Mas aqui é importante frisar um ponto: a pesquisa é um componente da defini??o da sua estrutura, mas n?o faz isso sozinha.

Regularly perform market research and benchmarking to understand compensation trends and practices in the regions where your organization operates. This involves comparing your pay structures to industry standards, ensuring that your compensation remains competitive and attractive to top talent.

Gather data on compensation trends and benchmarks in different locations and currencies relevant to your industry and job roles. This information will help you understand market rates and make informed decisions about your compensation strategy.

Tailoring specific local compensation practices maintains consistency and fairness. This can be conducted through a local market analysis where one use market research to understand the local salary trends, cost of labor versus cost of living along with various market conditions. Compliance, can be overlooked but ensuring that each compensation practice complies with local labor laws, regulations and cultural norms reinforces the consistency. Lastly, communication and transparency more often openly ensures there is appropriate practices being accepted internally and externally.

Striking a balance between localization and harmonization can be challenging. Over-localization may lead to inconsistencies and hinder scalability, while over-harmonization risks ignoring local nuances and negatively impacting talent recruitment. A one-size-fits-all approach may not be competitive or attractive in certain regions. Using a common currency or exchange rate may inaccurately reflect fluctuations, affecting purchasing power. Organizations should consider dynamic compensation strategies that adapt to market conditions and balance localization and harmonization needs.

Empresas que atuam em diferentes regi?es do Brasil já precisam estar atentas às necessidades de cada local. Agora, imaginem as que atuam também em outros países. Há quest?es básicas e indiscutíveis a serem consideradas. Cada localidade possui as suas obrigatoriedades, desde benefícios governamentais a quest?es econ?micas e culturais. Equalizadas essas quest?es mínimas, aí vem a filosofia outrora definida. é colocar em prática onde a empresa será mais agressiva, onde é estratégico crescer, enfim, os planos vêm para a prática. Um item importante e que pode ajudar muito na defini??o de estruturas internacionais é o PPP - Purchasing Power Parity, um método alternativo à taxa de cambio para se comparar o poder de compra de diferentes países.

Recognize regional variations in cost of living, labor markets, and economic conditions. Adjust compensation packages based on local factors to ensure that employees receive fair and competitive pay relative to their specific location. At the same time, aim for harmonization to maintain internal equity across the organization.

Adjust compensation levels based on cost-of-living differences and currency fluctuations in various locations. Use a harmonization approach to ensure fairness and consistency across different geographical regions while accounting for local market conditions.

Clearly communicate any changes to compensation levels or structures to your employees, ensuring transparency and understanding. Implement these changes systematically and consistently across all locations and currencies to avoid confusion or discrepancies.

Abertura e transparência s?o palavras indispensáveis nesse processo. Até para que se abra espa?o para contribui??es ou ideias que n?o haviam sequer sido cogitadas pela parte técnica. Uma política de remunera??o bem escrita e estruturada n?o serve de nada se n?o estiver publicada e entendida pelas pessoas. Mais que isso, as pessoas em posi??o de lideran?a precisam conhecer a estratégia e os motivos que levaram a empresa a estruturar o tema de remunera??o dessa forma. Isso traz maturidade e confiabilidade ao processo. Remunera??o n?o deve ser uma caixa preta inacessível às pessoas. Pelo contrário! Claro que guardados os devidos sigilos, comunicar os movimentos e a estratégia e compartilhar esse conhecimento com as pessoas é bastante saudável.

Transparently communicate any changes to the compensation structure, ensuring that employees understand the reasons behind the adjustments and how they align with the organization's goals. Provide ample support and resources to HR teams for the successful implementation of these changes.

Effective communication and implementation of compensation changes are essential for ensuring transparency, understanding, and acceptance among employees. Begin with planning your communication strategy. This starts with timing, identifying the audience, selecting the method and tailoring this to your organization. Next craft your message through clarity, transparency, highlight the benefits of the changes and remember to address the concerns. Moving to people, involve training managers though different channels such as information sessions on how to handle questions from employees. Other points to add are Q&A sessions, monitoring feedback, providing feedback mechanisms and sharing regular updates.

[Note: This response will be somewhat controversial, and there are plenty of exceptions where it's inappropriate.] Involve employees in the compensation process to enhance transparency and trust. Consider sharing anonymized compensation data or hosting a "Compensation Day" event with workshops and Q&A sessions. Use various communication platforms, including internal social networks and video messages, to reinforce the message. Implement unique technologies, such as blockchain, for secure and transparent compensation data management. By employing creative communication methods and innovative technologies, organizations can create a more transparent, engaging, and efficient compensation adjustment experience.

Consider several factors for effective compensation and talent optimization: 1) Reward employees based on performance and potential, providing growth opportunities. 2) Emphasize work-life balance with flexible arrangements and well-being support. 3) Align compensation philosophy with company culture and values. 4) Adapt to evolving needs and trends, learning and refining strategies. 5) Practice radical transparency, fostering trust through open communication. By harmoniously integrating these elements, optimize talent and contribute to your organization's long-term success.