Who decides fairness: Global benchmarks or local expectations?

Who gets to say what’s fair? Is it some universal standard, a set of global benchmarks that supposedly apply to everyone, everywhere? Or is it the local expectations, the unwritten rules and cultural norms that shape how people in a specific place view justice? The question is a daily struggle for HR professionals, CHROs trying to navigate whether HR fairness is a one-size-fits-all deal or something that bends with the local vibe. Fairness sounds simple but is a messy concept when you dig into it. 

Why do global benchmarks fail?

Global benchmarks promise a consistent way to manage a global workforce, as a one-size-fits-all playbook for fairness. They're the HR equivalent of a generic, pre-packaged meal: easy to implement and perfect for quarterly reports. This appeal is obvious for multinational firms seeking control and a clear, measurable standard for things like pay, diversity, and performance reviews. A centralized approach ignores the messy reality of local cultures and economies, where a policy that works in one country might be a disaster in another.

Global benchmarks are crafted in boardrooms, and can't account for cultural nuances, local market realities, or what "fair" truly means to employees on the ground. This creates resentment and disengagement, turning a well-intentioned policy into a source of conflict. Relying on a global benchmark makes HR seem like a mindless robot, deflecting accountability instead of engaging in the human conversations that matter.

Do local norms trump global policy? 

Local expectations are the unwritten rules of the game, the real-world benchmarks that dictate what people consider fair. They are shaped by culture and history - everything from how a bonus is perceived to who gets a promotion. While global policy manuals exist, they often crash head-first into these local norms. A public shout-out that motivates a team in one country might deeply embarrass another.

Local norms are a double-edged sword, and HR faces the challenge of it. On one hand, understanding them is essential to building trust and showing respect. Ignoring them is a surefire way to alienate a team. But, local expectations can be a logistical nightmare for HR. If every office has its own definition of fairness, how do you keep things consistent without turning into a corporate dictator?

The risk of getting it wrong: When fairness fails

Screw up fairness, and the fallout is brutal. Employees disengage, quit, or take their complaints public. A global policy that ignores local realities can spark resentment, tanking morale and productivity. Local expectations left unchecked can breed favoritism or exclusion, creating a workplace where only the “in” crowd thrives. 

• Employee disengagement and turnover: When employees feel fairness is a sham, they disengage, quit, or take their complaints public. A global policy that ignores local expectations can create resentment, tanking morale and productivity. This leads to low engagement scores and a loss of talent.
• Reputation damage: Fairness failures can have significant ripple effects, tarnishing a company’s reputation. In the age of social media, negative sentiment can lead to candidates dodging job postings and customers taking their business elsewhere. For HR, this can damage credibility and lead to difficult conversations with leadership.
• Loss of trust: The biggest risk is the loss of trust. Once employees believe that fairness is a sham, they stop believing in the company's values. Rebuilding this trust is incredibly difficult, and no new policy can easily win them back. 

HR is left holding the bag, answering to leadership for low engagement scores or to employees for broken promises.

Compensation and the culture code

Global standardized compensation policies are ineffective because they fail to account for the local cultural and social context of fair pay. What constitutes "fair" compensation isn't just a number; it's a social statement deeply influenced by local realities, a fact that global benchmarks miss.

• The benchmark vs. the rumor mill: While global policies rely on market data and job evaluations, employees determine if they're paid fairly by talking to friends, neighbors, and the local rumor mill. A number that is "market-aligned" in one country may not be viewed as fair at all in another due to significant differences in cost of living and local expectations.
• Compensation as a cultural statement: The value of a compensation package is culturally coded. In some cultures, a large variable bonus is a sign of respect and value. In contrast, a consistent salary is seen as more secure and more desirable in others. Forcing a high-risk pay structure on a low-risk culture will cause resentment, not motivation.
• Assuming numbers are universal: HR teams that believe they can set a global compensation policy and call it a day are making a fundamental mistake. The value of a number changes dramatically depending on the cultural value placed on factors like job security, benefits, and work-life balance.

Diversity and inclusion: Universal goals, local fights

Global diversity and inclusion (D&I) policies often fall short because they fail to account for what diversity means in different local contexts. The intention to create an inclusive workplace is sound, a one-size-fits-all approach can make D&I initiatives feel like a hollow exercise in corporate compliance.

The global-local disconnect in D&I

• Varying definitions of diversity: The meaning of diversity changes from one country to the next. For example, a global policy focused on gender balance may not address the primary diversity challenge in a region where the key issues are caste, ethnicity, or tribal affiliations. Ignoring these local realities makes D&I efforts ineffective and irrelevant.

• A corporate checkbox exercise: When global D&I goals don't align with local expectations, the initiative loses credibility and can be perceived as a mere checkbox exercise. Employees can see through a policy that doesn't address the specific issues they face in their communities.
• The HR role as translator: HR acts as a translator, adapting the overarching spirit of global D&I goals to fit the local context. This isn't about making the global standard relevant and meaningful to the people.

Blending global and local without losing your mind

So, how do you make fairness work when global benchmarks and local expectations are pulling in opposite directions? It’s not about picking a side, it’s about finding a middle ground that doesn’t feel like a compromise. 

• Listen to the ground-level: Start by genuinely listening to employees. Go beyond the C-suite and find out what people on the ground truly value and what makes them feel appreciated. This grassroots feedback is essential for understanding local expectations. 
• Use global benchmarks as a framework: Treat global policies as a baseline for things like equal pay and diversity goals. Instead of enforcing them rigidly, empower local HR teams to adapt these policies to their specific cultural contexts. For example, they can modify bonus structures to align with local norms or redefine D&I policies to reflect local cultural realities.
• Prioritize transparency: Communicate openly about why decisions are made and how they affect employees.Transparency is the glue that holds fairness together, even when the policies aren't perfect. It helps employees feel that their concerns are being heard and that they matter, whether they're in a large corporate office or a small-town branch.

• Local expectations as the compass: Local expectations are the essential ingredient that makes the system work. They provide the context and "secret sauce," reflecting the lived experience of employees. The best HR teams use these local insights as a compass to guide policy adaptation.

• Building bridges, not enforcing rules: Instead of simply enforcing rules, effective HR managers focus on building bridges between corporate headquarters and local teams. This approach fosters buy-in and ensures that employees feel their cultural context is respected, even when navigating a global framework.

Wrapping it up:

Fairness in a company is a constant power struggle between leadership, HR, and employees. Leadership driven by global benchmarks and public image sets the stage with policies that look great on paper. But it's HR's job to translate these mandates into reality on the ground, dealing with the inevitable fallout. It's a three-way tug-of-war where HR has to be the mediator, convincing corporate leadership to be less rigid and employees that global standards aren't the enemy. The moment any one group takes over, fairness dies, becoming just a corporate buzzword.

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