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Inequality Reward Policy And Unequal Pay For Locals In Vietnam

927 words - 4 pages

Since Vietnam became a member of the WTO in 2007, there were many opportunities for foreigner organizations to operate in Vietnam which also offer more job opportunities for the expatriates. Therefore, the expatriates are becoming more important to the success of many multinational organizations (Peter, Marion ad Ellen, 2008). The reward system for multinational firms has recently moved far beyond the original domain of expatriate pay as it has to attract, retain and satisfy both expatriate and local staff. It is important to compensate both expatriate and local staff to increase their productivity. However, the compensation must be fair and reasonable so that it can encourage the ...view middle of the document...

In order to motivate both local and expatriate staffs, the company should use the right reward system that can satisfy them all.
Reward management is a challenge for the companies HR department that operate internationally when it requires to be attractive to the right people to meet company objectives while lowering the costs (Mark Harrison, 2012). According to Armstrong (2007), the HR policies and reward should either be coverage, worldwide to be basically the same in each location or diverge, to be differentiated in response to local requirements. The HR manager needs to take into account some criteria such as the cultural difference between the host country and parent country, being flexible in grade and pay structure. There are many approaches that help the HR manager to reward and pay for expatriate while still satisfy the local employees. Financial rewards act as indirect motivation because they provide a tangible means of recognizing achievements. However, it can also be demotivated to the numbers who do not get the reward. There are many intangible rewards strategies that help the company to award their expatriate besides financial rewards. However, the reward package must be sufficient to attract, retain and motivate the employees but should avoid paying more than is necessary.
The most common issue for the expatriate is changing the environment of their own and their family’s life cycle. The company can offers the expatriate with allowances compensation which includes housing allowance, cost of living allowance, and home leave allowances.
Since the expatriates of the firm have been living in Vietnam for more than 5 years, and they all settled down, the company can offers them with home leave allowances and extended their holiday...

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