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Healthcare is one of the largest pharmaceutical companies in the world.

The headquarters is situated in New York, US, and today there are about 200 subsidiaries all over the world. The firm's situation is characterised by worldwide activities but mainly local business processes (e.g. development and production focusing on local/regional markets). Local issues are aggregated to the four significant regions in which Healthcare has organised operations, including Europe (e.g., France, Germany), USA/Canada, Latin America (e.g., Mexico, Brazil) and Page 5 of 5 Asia Pacific (e.g., Japan, Australia). Consequently, the HRM processes need to adapt to country, or region-specific conditions. The current compensation strategy for all expat managers and local staff primarily reflects global integration and the compensation policy includes the following elements: • Standardised compensation elements including variable pay elements (reflecting a rather risk-taking orientation; weight of this component is 35%) and fixed pay (reflecting a rather risk-averse orientation; weight of this component is 65%) • Individual (reflecting individual performance; weight of this component is 50%) and Team Component (reflecting group performance; weight of this component is 50%) • Standardised short-term incentives • Standardised long-term incentives (reflecting corporate performance) • Fringe benefits The HR manager at Healthcare is reviewing the pay elements. Should s/he shift any of the above pay elements from globally standardised to locally customised? Should s/he add some new pay elements or delete some existing practices from the policy? Should s/he change the weights or emphases (percentages) of existing elements of the pay system? MJustify
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