ORC Sightlines
February 2008
- The New Labor Relations Organization: Responding to Global Needs
- SIRS® Companies Pursue Global Job Mapping
- ORC Experts Discuss Taxation of Expatriate Compensation., the Role of OSHA, Exchange Rates
The New Labor Relations Organization: Responding to Global Needs
Globalization has now entered the realm of labor relations, influencing the way a major multinational is structuring its labor relations function. At the February meeting of ORC’s Labor/Industrial Relations Advisory Group (LIRAG), Ed Bocik, vice president of labor relations for Honeywell International, described how his company is reorganizing its labor relations function to respond to global business needs.
Honeywell started out with a fairly typical labor relations department. A corporate staff reporting to a vice president of labor relations managed all of labor relations throughout the company. This center-outward command organization supported a single labor relations strategy and a uniform approach to pensions and health care. But by its very nature the system was divorced from the business units and geographical locations it served. Driven by contract negotiations, the labor relations function’s efforts were unaligned with the objectives of the various businesses and unresponsive to the needs of regions outside North America.
In response, Honeywell tried another approach, moving to a decentralized model in which each strategic business group (SBG) owned its labor relations staff and budget, with dotted-line oversight by the corporate vice president of labor relations. This arrangement allowed the labor relations function in each SBG to partner closely with business leaders and embed labor relations issues in the business planning process. However, it also resulted in duplication of resources in some locations and too few resources in others, with no centralized mechanism for sharing resources across SBGs and no company-wide planning process for collective bargaining.
As a result of these experiences, Honeywell has decided to move to a center of excellence model for labor relations that will provide the best of both worlds. There will be one, global labor relations organization, but staff will be based in each region and dedicated liaisons will work with each of the SBGs on a global basis. This matrix ensures that regions have the resources they need, but that the resources can be deployed flexibly. It enables the function to align with the contingencies of individual SBGs and sites while also responding to the increasingly international nature of labor organizations and issues. Honeywell has established a suite of metrics to track the performance of the new organization.
For more information on labor relations trends or to learn about ORC’s US, Canadian, and Asian labor relations networks, contact Tom Connors, +1-212-852-0352.
SIRS® Companies Pursue Global Job Mapping
Global job mapping—the daunting task of determining equivalency between an organization’s jobs around the world despite differences in title and compensation—was a topic that sparked much discussion in recent meetings of the SIRS® Pharmaceutical Industry Advisory Group and the SIRS® Executive Compensation Survey Group. Job mapping on such a scale is an arduous exercise, but the benefits, according to Cynthia Laird, ORC’s director of SIRS® global surveys, are substantial in terms of a company’s workforce planning, succession planning, employee development, and compensation programs.
“Global companies want to leave enough flex in their systems to accommodate local markets and titling conventions,” Laird said, “but they need to have access to all their talent, wherever it is in the world. Global job mapping allows them to use their Enterprise Resource Planning and HR Management systems to the fullest extent to track who is doing what and where and apply the information to global talent management decisions.”
Getting agreement among stakeholders on which jobs are essentially the same can be complicated. To gain consensus, companies might consider assembling a global team comprising representatives from the line functions and HR, as well as backroom support from HR technical specialists to help analyze data and create the detailed work products. The team will need to agree on a common framework to use to describe jobs and equate job levels. Many are finding they can apply the SIRS® benchmarks and leveling system; others are developing systems modified to the special circumstances in their individual organizations. Whichever approach is used, the end result will streamline multiple HR processes including recruitment, performance management, promotion, and recognition and reward programs on a global basis.
SIRS® is one of the largest private compensation databases, with more than 1.5 million incumbents in North America, Europe, and the Middle East. For more information on SIRS®, the SIRS® Executive Compensation Survey, or the subject of global job mapping, contact Cynthia Laird, +1-310-846-4206 or Andrew Rosen, +1-212-852-0343.
ORC Experts Discuss Taxation of Expatriate Compensation, the Role of OSHA, Exchange Rates
ORC experts are often called upon by professional societies and publications to explain or comment on issues of the moment. Here are some recent instances that may be useful to Sightlines readers:
ORC clients who are also members of SHRM can view a video featuring ORC senior consultant Tricia Danielsen discussing taxation of compensation and benefits for U.S. expatriates. A SHRM user ID and password are required.
Frank White, senior vice president and leader of ORC’s Health, Safety, and Environmental practice, adds a voice of reason to a spirited debate in Industrial Safety & Hygiene News about whether OSHA should become more aggressive about writing new standards and enforcing existing ones. White argues that "‘Merely cranking out more standards (even assuming that's feasible) and issuing more citations (or more egregious penalties, or however one defines ‘stronger’ enforcement) isn't necessarily desirable or more effective from a worker safety and health perspective.” Instead, he suggests, OSHA could make a bigger impact by helping companies focus on management systems and culture.
Geoff Latta, executive vice president and head of ORC’s International Compensation Service, tells HR Executive that companies should be responsive—but not “extreme” in their response—to how changes in exchange rates affect expatriates’ pay. Adjusting pay every month would fall into the extreme category, but waiting a year between adjustments, when exchange rates are volatile and employees are on the short end of the stick, will only lead to disgruntled expatriates.