The shared service centers of a multinational technology company are concentrated in one country. They provide back-office operational support for the finance and accounting, procurement, and HR functions of the company. The local talent market for the back-office operations skills is very competitive, but the company has been successful in recruiting experienced professionals from its competitors. The main draw has been the generous compensation and benefits package and the general perception of an amiable and cooperative management team. While competitors' workforces have unionized in this country, this company's workforce has remained union-free.
The annual planning process has kicked off. The process begins top-down with the global HR and finance teams recommending the payroll increase budget for each country based on key economic indicators, company performance, affordability, and compensation market survey data and recommends a salary increase budget of 18% for this country. The country HR director is concerned that the recommended budget is too low and believes that in order to remain competitive and compensate for inflation, the increase should be 30%. The country director brings her concerns and recommendations to the global VP of HR.
In a discussion with the global VP of finance and the global functional leaders, the global VP of HR learns that the 18% budget increase is a stretch and that going any higher will have a negative bottom-line impact.
18) Which is the best first step the VP of HR should take to address the differences in opinion and concerns on the salary increase budget?
19) Which is the best step that the VP of HR should take at this point in time?
20) Which action should the country HR director recommend country leaders take that would proactively support a union avoidance strategy?