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Coca-cola's International Rewards/Compensation Management

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Xiang Shi

on 14 June 2013

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Transcript of Coca-cola's International Rewards/Compensation Management


Group infomation
Extrinsic rewards
Intrinsic rewards
(non-financial rewards)
Reward management system
s2740293 Xiang Shi
s2769965 Di Wu
s2728141 Syd Norman
s2748760 Kim Robertsen
Coca-cola Company introduction & background
System analysis (extrinsic & intrisic)
Incorporated as Coca Cola in 1888 in Atlanta, USA
Originally contained cocaine as an ingredient
Worlds largest beverage company
1.7 billion servings a day, sold in over 200 countries
700,000 people associated with Coca Cola world wide
Operating income of $10.2 billion from revenue $46.5 billion
2011 voted best global brand by www.interbrand.com and 6th most admired by fortune Magazine with a brand value estimated at $71.9 billion
Donated $70 million to 263 community groups worldwide
Committed investment of $30billion over 5yrs to developing markets in China, India, Russia and the Middle East through mergers and acquisitions
4 year productivity programme realised more than $500 million , an example being the use of plant based packaging and other sustainable initiatives.
Dierct compensation
(financial remuneration)
Indirect Compensation
services and benefits)
• Childcare
• Gym
• Pensions
• Leave
• Car
• Superannuation
• Base wage
• Bonuses
• Individual &
• Profit sharing
• Commissions
• Stock options

2.First choice (e.g. holiday leave)

3.Receipt of valued things
(e.g. office with window)
Going rate (market rate) approach vs Balance sheet approach

Culture differences in relations to pay

Hofstede theory suggestion

International compensation consultants that know the conditions

Other issues
Compensation philosophy
Coca Cola has a global compensation framework that is designed to ensure that they:

• Reinforce a high performing culture;

• Develop employees to their highest potential;

• Focus on programs that will drive sustainable growth and that are valued by employees;

• Have a common and transparent approach for decision-making with respect to compensation.
The design of the compensation program is to:
• Establish a clear connection between individual rewards, the performance of each of their employees (including executive officers) and the company’s overall performance;

• Pay for performance and behaviours that reinforce the values underlying their “Manifesto for growth,” including leadership, collaboration, integrity, accountability, passion, diversity and quality;

• Be transparent in intent and simple in design;

• Optimize the investment in their people by investing in those plans that not only drive business performance but are competitive and valued by their employees, including the executive officers.
Coca Cola’s compensation committee in conjunction with management evaluates risks and rewards in line with the overall compensation philosophy.
Key components of an IHRM
Base salary
Foreign service inducement
Foreign service premium
Cost-of-living allowance
Housing allowance

Approaches to international compensation
based on local market rates

Compensation based on the selected survey comparison

Equality with local national

Identification with host country

Equity amongst different nationalities
Good and services


Income taxes

The going rate approach
The balance sheet approach
Tax equalization

Tax protection
Why rewards?
Do you get motivated by money?
What motivates you? - why?
Intrinsic Rewards

-Job satisfaction
-If work is valued, people feel valued
-Deeper effect and more long term

-Supplying the best tools possible
-Encouraging the employees
-Recognizing good work
-It's easy! Just say : "Thank you"
Coca cola & Intrinsic rewards
Higher management vs Lower management

Retire plan

Decision making

Employees empowerment
Equality vs inequality

Certainty vs uncertainty

Controllability vs uncontrollability

Individualism vs collectivism

Materialist foregrounding vs personal foregrounding
Hartel, C.E.J. & Fujimoto, Y. (2010) 2nd Edition, Human Resource Management, Pearson Education, Frenchs Forest, NSW.
Markova,G. & Ford, C. (2011). Is money the panacea? Rewards for knowledge workers, International Journal of Productivity and Performance Management, 60 (8), 813 – 823
Romero, J. & Kleiner, B.H.(2000), Global trends in motivating employees, Management Research News.23(7 ),14 – 17
E.l. Deci, (1971). Effects of externally mediated rewards on intrinsic motivation. Journal of Personality and Social Psychology, (18), 105-115.
T.M. Amabile, W. DeJong, M.R. Lepper, (1976). Effects of externally imposed deadlines on sebsequent intrinsic motivation. Journal of Personality and Social Psychology, (34), 92-98.
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