HRM340 Case study: Grandview Global Financial Services, Inc.
Grandview Global Financial Services, Inc.
Grandview Global Financial Services is an international corporation providing multiple financial services. Although it is one of the smaller players in the field, the firm has about 20,000 employees worldwide. Corporate strategy has focused on serving a niche market comprising high-net-worth individuals, providing them with all the wealth management services they require. These services include investments, insurance, banking, real estate, financial planning, and related services.
The linchpin making all these services work well is the quality of the employees—the degree to which they are motivated to provide “over-the-top” attention to clients’ needs. Clients have come to expect this level of service regardless of where they might happen to be and regardless of the time. Because of clients’ high expectations, every employee is expected to provide flawless service.
As it has expanded globally, Grandview has hired employees from all the countries in which it does business. Although all employees are expected to speak English, business is conducted in nine different languages in 45 locations. Grandview has invested heavily in developing a uniform corporate culture but has not succeeded in doing so in all locations.
One difficulty has been the PM and reward systems. Each geographic area developed its own PM tools, which reflect the national culture and the past experiences of local employees. There are a variety of systems using different performance criteria. Most of the PM materials are in Microsoft Word. Some of the systems seem to work all right, although others do not. None of the systems are coordinated, except to the extent that those final performance ratings are sent to the Grandview corporate HR department. There has been enormous pushback and noncompliance with PM policies from the employees because of the difficulty of the paper performance process as well as the nine different languages being used worldwide.
Rewards systems are similarly localized. Base pay, incentive systems, and benefits have grown up in each geographic location in accord with local market practices, laws, and customs. The complexity and number of Excel spreadsheets needed to manage the financial targets and the resulting compensation plans for that many employees have created perceived and actual inequities. It is difficult to transfer employees across geographic areas because of the different systems in place, and awareness that employees in different locations have very different terms and conditions has created morale problems.
Corporate HR has PM and rewards modules in its HRIS covering U.S. employees, but this takes care of only about 60% of Grandview’s employee population. An executive rewards module does cover about 2,000 senior executives worldwide, but all foreign data are sent from different locations and entered into the module at headquarters. Part of the historic reason for this process involves the legal requirements concerning privacy of information in the EU and some other locales; it is easier to get executives to grant permission for the transmission of specific data when those data are used to calculate stock option awards and other executive incentive payments granted by the corporation.
Corporate HR would like to move away from local systems and institute a corporatewide system that relies neither on Word documents for performance reviews nor on Excel spreadsheets for the resulting compensation plans that result from the overall performance ratings. It was thought that common systems for PM and rewards would support a more unified culture and help translate Grandview’s corporate strategy into individual performance plans worldwide.
The ideal system would be a Web-based, multilingual, integrated PM and compensation system. The PM system would be accessible by managers and their direct reports and would be tied to corporate strategy and the current business plan. Managers and their direct reports could access the system at any time to see performance criteria, measures, and standards and to look at current progress against standards. The rewards and benefits modules, although based on local law and customs, would be standardized with respect to process, fostering a more uniform rewards culture. It is critical to HR managers that the technology selected is flexible enough so that yearly changes to the application could be made efficiently and legal requirements in different locations could be accommodated, as well as changes in those requirements.
Because the performance goals are based on financial targets, and employees’ merit and incentive payments are directly related to employee performance as well as Grandview’s overall results, all necessary functionality for the compensation process should be built into the performance system. At year end, results should be able to be imported directly from corporate financial systems and used to generate performance reviews and compensation plans for the employees. The resultant pay increases and bonus payments would be fed directly into the payroll system already in use by Grandview in the United States and abroad. The system administrators should be able to ensure worldwide compliance with the performance process directly from the system through a variety of reports.
Case Study Questions
- What is the role of PM in establishing and maintaining corporate culture?
- What is the role of compensation and benefits in establishing and maintaining corporate culture?
- Since laws, labor markets, and customs relevant to PM, compensation, and benefits differ from country to country, does it make sense to try to maintain a common global process for managing each of these areas?
- Given all the cross-country differences, why would a global organization want to have a common HRIS?
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