Amrita Arora

S143F0005

Human Resource Management

Assignment

In A World of Pay
Case Analysis
Typeware German Software Company
Xon Technologies American Software Company
Main Characters

Renate Schimdt Typwares head of human resources

Jurgen Mehr- Typwares European head of marketing
Anne Prevost Director of Marketing, Xon Technologies
Thomas Gutschein Typwares CEO
Rainer Barth - consultant

Decisions

What kind of international compensation should Typware offer that is acceptable to both
current as well as prospective employees?

Problems

Mehrs displeasure about a prospective new hire whom he had favored, Anne Prevosts
pay offer (244,000 euro) not fair and humiliating
Anne Prevost had another offer of stock options from a competitor Seistrand Systems
If they pay a person who is just coming into the company that much, it will make others
who have been with them for a long time feel that they dont care about them
Salary system is out of order - everyone should be paid the same for doing equal work

Process

Annes Achievements
Had engineered a huge uptick in sales
Deep understanding of global software industry
Intelligent, careful strategist
Good divisions performance under brutal economic conditions
Spoke excellent German
CEO impressed
Factors considered in deciding the pay offer:
cost-of-living difference US and Europe
Experience
Strategic position to increase international revenues
Following CEOs direction pay what it takes
Jurgen conservative about salaries
Reasons for Prevost to accept the job offer:
Xon cant promote her

Amrita Arora
S143F0005

Human Resource Management

Assignment

not satisfied with the lateral position she has been offered at Xon
Seistrand presents risks
interested in raising her sons in Europe
Lesom system
very strict, albeit generous, pay grade system;
salaries did not vary substantially from country to country
If an employee was not satisfied, he or she simply got a job elsewhere.
Typware System
Pay was not rationalized
salary and benefit disparities among the managerial ranks
female and minority employees made less than their white male counterparts
Most expatriates received the equivalent of their German salary plus enrollment in
local health care programs, as well as contributions to their German social
security and retirement plans
individual expatriate packages had become increasingly complicated over the
years - each case was special.
Pevost would need compensation for:
American social security
Support her mother
U.S. medical care

Suggestions
A Comprehensive Package
To make Anne accept the position and be in Germany for several years, as she seems to be a
valuable addition keeping in mind the international expansion strategy, Typware should
determine which compensation benefits are essential and then decide whether expected
advantages of having on board will be worth the cost. Typware must make the package attractive
enough to accept the job but at the same time include some merit based variables as incentives
for her to deliver results.
International
Compensation

Base Pay

1. of current org
2.of prospective org

Differentials

Incentives

Assistance
Programs

1. Cost of Living

1. for relocation

1.health care benefits

2. Tax equalization

2. for performance

2.supporting mother

3. Exchange rate

3. of current org

3. social security

Once Anne has adjusted, Typware can renegotiate her package and focus new benefits on performance.