External influences on compensation systems in multinational enterprises : some comparisons of subsidiaries and companies in Australia and Singapore

摘要

Accompanying the world-wide growth of multinational national enterprises (MNEs)udhas been an increasing interest in the broad issues of international human resourceudmanagement (IHRM) and the management of people in MNEs. The uniqueness ofudmanaging human resources in an MNE is the need for the organisation to operate inudmore than one national context, possibly with three different categories of employeesud— host country, parent country, and third country nationals. Taking into account theudunique elements of the external environment in each country of operation presentsudparticular challenges for the design of human resources policies and practices,udincluding compensation (remuneration) systems.udThis thesis focuses on the compensation systems of MNE subsidiaries, and uses theudguiding question: 'How does the external environment of an MNE subsidiaryudinfluence the design of its compensation system?' Adopting a case studyudmethodology, the thesis examines the compensation systems of five MNEs (over theudperiod 1992-95) by studying pairs of subsidiaries and companies based in Australiaudand Singapore. Two of the MNEs were European owned, and three Australianudowned. The Summary Profile of Experiential and Algorithmic Compensation Patternsudof Gomez-Mejia and Balkin (1992) is applied to each pay system, and the similaritiesudand differences analysed. Possible key external environmental differences and someudinternal characteristics that might have caused those similarities and differences inudcompensation design are then suggested for each MNE. In addition, the roles of theudcorporate and national head offices in the compensation design of their subsidiariesudare explored. While not usually included as an external influence on human resourceudmanagement of MNEs, the MNE head office does form part of the integratedudorganisational network within which MNEs operate.udThe external factors receiving specific attention for their impact on subsidiaryudcompensation design are employment legislation, industrial relations systems,udeconomy and incomes policies, and national culture. While the thesis analyses theseudattributes separately for simplicity, it is recognised that they are largely interdependentud(Jackson & Schuler, 1995), and that it is impossible to rigorously determine theudimpact of each variable and its interaction with others. The main outcome of theudthesis is, therefore, a discussion leading to an explanatory framework on the influence udof the external environment and the MNE head office on MNE subsidiaryudcompensation systems, together with some propositions grounded in the existingudliterature and case study findings. The thesis concludes with a consideration of theudimplications of the findings for strategic IHRM theory and practice, and furtherudresearch.