Page 161 - DMGT548_GLOBAL_HRM

Global HRM

Notes less than 5% of its workforce. This will change in the future as Lucent will be expected to
establish a ‘Bell Lab presence’ in many of its significant international markets.
Labour Relations

Given Lucent’s labour intensity and increasing pressure to control costs, the Company is
likely to face a major challenge with respect to labour relations. Lucent cannot afford to
continue strategies of the past. The company is intent on changing its traditional relationship
with its labour unions based on the fact that it no longer is a telecommunications service
provider and competes against a different set of competitors.
Questions:
1. What are the ‘salient features’ of the human resource policies being practised in
Lucent? Describe in detail.
2. Do you think the competency model for business partner role in Lucent is effective
in view of the integration of competencies into an HR system of learning and
development? Discuss in the light of the facts given in the case.
3. Do you feel that compensation policies in Lucent are comparable with some of the
best international employers? Explain your views with the help of examples, if any.
4. What are the various HR challenges being faced by Lucent in view of the highly
competitive global markets? How is Lucent managing the same?

Source: Rao, P. L. International Human Resource Management. First Edition. India. New Delhi.

8.5 Summary

 Compensation tends to vary widely around the business world due to the economic
differences, differences in development levels, political factors, traditions and culture.
 Compensation is the financial remuneration the employees receive in exchange for their
labour.
 HR executives in global firms spend a great deal of time and effort in designing and
managing compensation programmes because of their high costs and impact on corporate
performance, commitment of employees and their retention.
 Whenever the employee is send abroad for the assignment, it is preceded by the fresh
negotiations between the employer and the employee for its compensation.
 The area of international compensation is complex primarily because multinationals must
cater for three categories of employees: PCNs, TCNs, and HCNs.

 The key components of international compensation include base salary, Foreign Service
inducement/hardship programme, allowances, benefits and taxation.

 Compensation decisions are very strategic decisions and are important for achieving
organisation goals and objectives.
 Executive compensation structure varies from organisation to organisation.

8.6 Keywords

A Say on Pay: A non-binding vote of the general meeting to approve director pay packages.
Balance Sheet Approach: The base salary for PCNs and TCNs to the salary structure of the
relevant home country.

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