Inequality Reward Policy and Unequal Pay For Locals in Vietnam

Since Vietnam became a member of the WTO in 2007, there were many opportunities for foreigner organizations to operate in Vietnam which also offer more job opportunities for the expatriates. Therefore, the expatriates are becoming more important to the success of many multinational organizations (Peter, Marion ad Ellen, 2008). The reward system for multinational firms has recently moved far beyond the original domain of expatriate pay as it has to attract, retain and satisfy both expatriate and local staff. It is important to compensate both expatriate and local staff to increase their productivity. However, the compensation must be fair and reasonable so that it can encourage the productivity and loyalty of their international and local employees (Nariz,2012).

Issue

According to the interview, Ms. Chi said that the company has different methods and policies reward to motivate both the local employees and expatriate. The expatriates receive financial reward such as cash bonuses and returning home airplane tickets once or twice a year, depends on their position. However, for local staff, they only receive the based salary and their bonuses if they achieved the organization’s objectives and goal in time. The amount received by the expatriate is usually higher than the local staff because the company wants to maintain the standard of living for the expat as same as when they lived in their home country. Therefore, in some cases, the local staffs who have more complex position still receive a lower reward than the expat. This inequality reward policy has created a conflict among the staff and affected to their performance. In addition, unequal pay schemes can create more dissatisfaction than satisfaction if the local staff perceived ...

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...ublic applause and private thank-you are both important as it motivate the employees to make even better use of their talents to achieve more challenging work (Armstrong, 2007). Whenever an employee achieved the firm’s objectives and bring benefits back to the firm, the firm can organize a small party to encourage the staff to keep up with their work and encourage others to follow and learn from the achiever.

Furthermore, to maintain and develop the relationship between the expatriate and local staffs, the company can change its office’s structure by switching to an open office. With an open office, the expatriate and the local staff will have more bonding opportunities to develop their relationship, sharing thoughts and ideas for the work. Besides, the company can also organize a fun day or a vacation that help the employees to relax and get to know each other.