MANAGING NEW PAY PROGRAM INTRODUCTIONS TO ENHANCE THE COMPETITIVENESS OF MULTINATIONAL CORPORATIONS (MNCS)

The design and introduction of new pay programs may be particularly challenging for multinational corporations (MNCs) because, given their diverse employee base, they face varied employee expectations regarding pay. We offer a model of how national cultural norms affect employee expectations for, and judgments about, pay fairness. We also describe how firms can best use two international compensation strategies for MNCs (a global integration strategy and a local responsiveness strategy) to optimize employees' justice judgments regarding new pay programs. More favorable justice judgments should improve the chances of new pay program survival and, subsequently, contribute to firm competitiveness.