Equity is a fundamental principle of compensation". How do multinational corporations ensure that pay differentials between international staff reflecting different labour market conditions does not lead to resentment and de-motivation of staff
From the very beginning of the history of wage labour, equity has been considered as the fundamental principle of compensating labour.
Differential payment is not just a business tactics but a whole some strategy developed by new international human resource management for multinational corporations. Yet, the reality of pay differentials among the international staff does not normally lead to grievances among them. Multinational corporations usually stick to a number of principles of international compensation strategies in order to overcome the ill-effects of pay differentials. The present study is an effort in delineating the mechanism of pay differentials followed by multinational corporations and its effect over the employees from different national environments. The practices of multinational corporations aim to get rid of the resentments and motivational issues pertaining to pay differentials among the international staff would be examined in detail and with theoretical rigour.
There is no consensus among the theorists of international compensation strategies over the question of the correct approach to the understanding of pay differentials, related grievances and appropriate compensation strategies (Scullion and Linehan, 2005). Rather than adhering dogmatically to a single approach, the paper tries to synthesise the wisdom each approach in understanding and defining the subject-issue. ...