Beyond managerial talent: ‘key group’ identification and differential compensation practices in multinational companies

Abstract

With the maturation of strategic human resource management scholarship, there appears to be a greater call to move from monolithic workforce management to a more strategic and differentiated emphasis on employees with the greatest capacity to enhance competitive advantage. There has been little consideration in the literature as to whether organizations formally identify key groups of employees based on their impact on organizational learning and core competences. Using survey evidence from 260 multinational companies (MNCs), this paper explores the extent to which key groups of employees are formally recognized and whether they are subject to differential compensation practices. The results demonstrate that just in excess of half of these MNCs identify a key group. There was considerable differentiation in the compensation practices between these key groups, managers and the largest occupational group in the workforce. The results give rise to questions worthy of future investigation, namely whether the differentiated approaches used lead to improved performance outcomes.

Keywords:

• compensation practices
• Ireland
• key group
• multinational company
• rewards
• strategic HRM
• talent management

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. We also used chi-square tests to assess whether having one vs. having more than one key group differs depending on the characteristics of the firm (country of origin, size and sector) and the answer was again, No. As such, we can safely conclude that there is no difference in either the composition of the companies having one or more than one key group nor is there any difference in the treatment of these groups in terms of compensation practices.

Additional information

Funding

This work was supported by the European Commission’s Marie Curie International Research Staff Exchange Scheme [FP7 IRSES-GA-2008-230854 INTREPID]; the Irish Research Council for the Humanities and Social Sciences and Labour Relations Commission.