SHRM26 Debrief · Global Workforce Trends · #1635
Global Pay Strategies: How to Compensate Your International Employees Effectively and Equitably
with John Rubino
"I am on a worldwide crusade to abolish merit increase base salaries."
What it was about
Total reward strategies must be personalized and culturally nuanced rather than one-size-fits-all, and organizations should shift away from merit increase base salaries toward performance-based variable compensation tied to transparent, well-communicated goals.
By the numbers
median age of 37 and above
Economists' threshold for classifying a workforce as 'aging'
median age of 47
An audience member's company workforce median age, flagged by the speaker as a warning sign of an aging workforce
median age of 25
Another audience member's company workforce median age, cited as a young, vibrant workforce
Key notes
- Build a documented global employee success profile so hiring and reward decisions are consistent across a diverse, global workforce.
- Move performance out of base pay entirely: redefine base pay increases as market adjustments and put all performance-based rewards into a variable, lump-sum compensation plan.
- Cap variable pay upside (e.g., at 150% of target) and weight performance categories (individual, regional, global goals) differently by job level. Executives should weight more toward global goals; support roles toward individual goals.
The contrarian takeMerit increase base salaries, a near-universal HR practice, should be abolished entirely. They're a zero-sum, demotivational bureaucratic exercise that finance departments favor only for cost containment, not because they motivate performance. The speaker also argues for openly communicating pay differences across employees and countries instead of treating compensation as confidential.
Take this back Monday
Do this for your team
Send a short note explaining why pay varies by role or location instead of staying silent — secrecy breeds more distrust than the numbers themselves.
Say this in your next leadership meeting
Merit increases baked into base pay are a zero-sum, demotivating cost-containment tool — real performance rewards should be transparent, variable, and capped.
Watch out for
- Applying one-size-fits-all headquarters reward strategies to all global operations (cited IBM's failed global rollout in the 1950s as the 'kiss of death').
- Keeping merit increase base salaries as the primary reward vehicle. It's a zero-sum, individualistic system that undermines stated team-based cultures and works mainly as a finance cost-containment tool, not a motivator.
- Assuming pay is a secret that employees don't discuss with each other, rather than proactively communicating pay rationale.
Fun fact · John Rubino
John Rubino's global consulting work has taken him to 109 countries.
If this landed, see these
↳ Go deeperFair Pay, Smart Tech: Using AI + HI to Design Equitable and Transparent Compensation SystemsShows how to actually build the transparent, well-communicated pay system this session argues for.⇄ The counterpointFrom Toronto to Brussels and Everything In Between: Navigating the New Era of Global Pay TransparencyTransparency isn't just a cultural choice here, it's a fragmented legal minefield employers can't dodge.✦ The unexpected oneModernizing Compassion: How Strategic Bereavement Policy and Prepared Leaders Support Employees Through LossSame lesson in a different context: one-size-fits-all policy fails without personalized, culturally aware delivery.