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Corporate Benefit Plans: International and Domestic Perspectives.

Corporate benefit Plans: International and domestic perspectives. Edited by Mary E. Brennan. Brookfield, WI, International Foundation of Employee Benefit Plans, 1988. 192 pp. $30.

During the 1980's, American businesses began to realize that they were no longer operating within the context of a solely domestic economy. Corporations were now playing on an international field complete with new rules and new boundaries. In the 1990's, this may become even more evident as American corporations continue their attempts to capture new markets.

The growth of the global marketplace has increased the number of demands placed upon American businesses. New technologies and new products will need to be developed. It may also become necessary to alter the benefit packages provided to employees as the needs of these employees change. The International Foundation of Employee Benefit Plans addressed the latter issue at their annual conference in 1988. The Foundation has now issued Corporate benefit plans: International and Domestic Perspectives, a compilation of 12 papers that were presented at the conference. These 12 papers explore the international and domestic benefits issues that will be among the most predominant as we approach the 21st century.

In "International Benefit Perils of the '90's," David J.D. McLeish outlines what he sees as the major dilemmas that will confront benefits managers in the 1990's. McLeish is primarily addressing the issue of retirement benefits, but his arguments present a proper starting point from which to address the entire benefits spectrum.

McLeish believes that the major problem with the present structure of benefits is that they were designed to match a social environment that no longer exists. Social changes have placed heavy burdens on the Social Security programs of many countries. These changes include increases in the life expectancy rate, the divorce rate, the number of single parents, and the number of dual-income families. Workers have also increased the frequency with which they change jobs during their worklife. These new factors have caused many governments to look to the private sector for help. As the cost of providing benefits to their employees has increased, the private sector is beginning to echo many of the complaints of the public sector. McLeish feels that legislation is needed to ensure that all members of society receive sufficient income and benefits during retirement.

In her essay, "Incentives From an International Perspective," Heather Bowker addresses the specific problems that can occur when an American multinational corporation attempts to develop incentive packages for its overseas operations. The major objectives of incentive programs are similar in all nations. These plans strive to reward exceptional performance, reduce fixed costs, and motivate employees. However, this is where the similarities end. As Bowker points out, American firms cannot make the mistake of assuming that employees of a foreign subsidiary either want or need the same benefits as their American counterparts.

Bowker suggests that multinational corporations must recognize the cultural, legal, and economic differences that exist across national borders before they attempt to implement an incentive plan. It may not be possible just to transport the plan that is currently in use in the United States. For instance, a bonus that surpasses base pay (like those often awarded to top U.S. executives) would be seen as embarrassing in many foreign countries. Other foreigners are uncomfortable with individual performance bonuses, preferring team incentives instead. Large cash payments are also not of much use in countries with high tax brackets, where a significant bonus often just disappears with the tax man. Other perks, such as deferred compensation or use of a company car, might be more suitable. To prepare for these difficulties, Bowker recommends that benefits managers use the "Six C's": concept building, consistency, clarity, cultural sensitivity, continuous reinforcement, and constructive feedback.

Turning toward the domestic front, Karen B. Greenbaum suggests that the entire world of employee benefits could be transformed through the use of interactive communication in the workplace. Greenbaum explains this new procedure in her paper on "Interactive Communication Techniques." The term refers to the exchange of information that takes place between the computer and the employee. This technique allows the user to set the pace of the dialogue, to choose options, and to decide how much depth he or she desires.

Interactive communication has many possible applications that could be used in the field of employee benefits. It would allow the user to personalize benefit information to suit his or her needs. It ensures that the message that is delivered is consistent. It allows a steady stream of information about changes in benefit offerings and coverage. Finally, it could eliminate undue administrative burdens. Employees would be able to update their personal records when necessary, change their plan selections, and receive notice of the status of defined contribution and defined benefit plans.

This book contains articles on many other topics of interest, including care of the elderly, AIDS in the workplace, regulatory developments in Japan, and an international overview of the escalating cost of health care. As these issues continue to come to the forefront both politically and economically, the search for solutions will intensify.

-Michael Bucci Division of Occupational Pay and Employee Benefit Levels Bureau of Labor Statistics
COPYRIGHT 1990 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Author:Bucci, Michael
Publication:Monthly Labor Review
Article Type:Book Review
Date:Jun 1, 1990
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