The management of pay, wage classification and performance in the UK subsidiaries of US MNCs

Despite the existence of a substantial literature on the management of pay within multinational corporations (MNCs) (cf. for example, Bloom et al 2003; Gomez-Meija and Welbourne 1994; Schuler and Rogovsky 1998; Sparrow 1999), our knowledge of the nature of pay policy in the foreign subsidiaries of such firms remains very limited. The overwhelming majority of the existing literature, written from a management perspective, concentrates almost exclusively on reward management for international managers (cf., for example, Toh and Denisi 2003; Fenwick 2004), or senior subsidiary management (Tosi and Gomez-Meija 1989; Kosnik and Battenhausen 1992). Indeed, in spite of the evident significance of the subject, the management of pay of non-managerial workers is not explicitly mentioned at any point in several major textbooks on international HRM (cf., for example, Harzing and Van Ruysseveldt, eds., 2004; Dowling and Welch 2004). This not only influences the likely results of the research that is carried out – given the higher likelihood that senior managers will participate in an international internal labour market, one might deduce that systems at this level are relatively likely to be ‘global’ in nature but more importantly it fails fully to tackle the issue of how MNCs deal with variation in the national employment systems they deal within. In other words, in order to examine the influences on how MNCs act in this central area of personnel policy, it is necessary to take account of the management of the full range of those employed by them.