Compensation Plans Around The World Mercer CPAW - Sept 9 '09

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September 2009
2. Mercer Human Resource Consulting

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Mercer Introduction to Compensation Plans Around the World
September 2009
Copyright 2009 Mercer LLC. All rights reserved. 2

September 2009
Contents
1. Mercer/Marsh Global Presence..................................................................................................................................................................................................... 4
2. Contact Information ...................................................................................................................................................................................................................... 5
3. Executive Summary ...................................................................................................................................................................................................................... 6
4. Definitions................................................................................................................................................................................................................................... 12
5. Country Snapshots ...................................................................................................................................................................................................................... 14
6. Popular Resources....................................................................................................................................................................................................................... 65
Page Page Page Page

AMERICAS ASIA PACIFIC WESTERN EUROPE EASTERN EUROPE,
MIDDLE EAST, AFRICA
Argentina 14 Australia 24 Austria 38 Czech Republic 54
Brazil 15 China 25 Belgium 39 Greece 55
Canada 16 Hong Kong 26 Denmark 40 Hungary 56
Chile 17 India 27 Finland 41 Israel 57
Colombia 18 Indonesia 28 France 42 Poland 58
Mexico 19 Japan 29 Germany 43 Russia 59
Puerto Rico 20 Malaysia 30 Ireland 44 Slovakia 60
United States of America 21 New Zealand 31 Italy 45 Slovenia 61
Venezuela 22 Philippines 32 Netherlands 46 South Africa 62
Singapore 33 Norway 47 Turkey 63
South Korea 34 Portugal 48
Taiwan 35 Spain 49
Thailand 36 Sweden 50
Switzerland 51
United Kingdom 52
Both Introduction to Compensation Plans Around the World and its companion publication, Introduction to Benefit Plans Around the World, can be ordered from www.mercer.com/bpaw.

September 2009
1. Mercer/Marsh Global Presence
FINLAND
NORWAY SWEDEN
ESTONIA
DENMARK LATVIA
ISLE OF MAN
CANADA
UK GERMANY LITHUANIA RUSSIA
IRELAND NETH. POLAND UKRAINE
CHANNEL IS. CZECH & SLOVAK REPS.
BELGIUM LUX AUSTRIA KAZAKHSTAN
FRANCE HUNGARY
ROMANIA
SWITZERLAND CROATIA SLOVENIA
PORTUGAL MONACO ITALY BULGARIA
UNITED STATES SPAIN TURKEY
GREECE AZERBAIJAN JAPAN
MALTA
TUNISIA ISRAEL KOREA
BERMUDA
MOROCCO CHINA
BAHAMAS EGYPT SAUDIA ARABIA
CARIBBEAN BAHRAIN HONG KONG
TURKS & CAICOS
MEXICO DOM. REP. US VIRGIN IS. MALI UAE TAIWAN
HONDURAS PUERTO RICO
GUATEMALA CAYMAN IS. BARBADOS ST. LUCIA BURKINA FASO OMAN INDIA THAILAND
JAMAICA GRENADA SENEGAL CHAD PHILIPPINES
EL SALVADOR PANAMA TRINIDAD GHANA NIGERIA
NICARAGUA GUYANA VIETNAM
COSTA RICA ANTILLES BENIN CENTRAL AFRICAN REP. SRI LANKA
VENEZUELA MALAYSIA
COTE D’IVOIRE CAMEROON
COLOMBIA UGANDA SINGAPORE
GABON KENYA
ECUADOR
TANZANIA
INDONESIA
PERU BRAZIL PAPUA NEW GUINEA
MALAWI
ZAMBIA
BOLIVIA ZIMBABWE
MOZAMBIQUE FIJI
BOTSWANA MADAGASCAR
AUSTRALIA
SWAZILAND
CHILE NAMIBIA SOUTH AFRICA
PARAGUAY Fifth Quadrant (Mercer Affiliate)
URUGUAY
ARGENTINA
NEW ZEALAND
Mercer
Marsh
September 2009
2. Contact Information
For further information, please contact your existing Mercer consultant and/or any of our global report team members:
Global Report Team
Local Authors: Names and e-mail addresses are listed in each Country Snapshot.
Executive Sponsor
Steve Gross (Steve.Gross@mercer.com)
Global Project Manager

Elisa Early (Elisa.Early@mercer.com)
Senior Editors
Heli Olkkonen (Heli.Olkkonen@mercer.com)
Rivkah Pontos (Rivkah.Pontos@mercer.com)
Thank you to Mercer colleagues (in alphabetical order) who gave generously of their time for content development and guidance: Alistair Peck, Betty Blue,
David Newman, Kay Leach, Mitch Potter, Molly Zangrilli, Philip Grabfield, Sally Shaw, Shufang Yeo, Stephanie Poe, Steven Faigen, and Tracey Jones.
About Mercer and Marsh
Mercer is a leading global provider of consulting, outsourcing and investment services. Mercer consultants help clients design and manage health, retirement and other
benefits, and optimize human capital. The firm also provides customized administration, technology and total-benefit outsourcing solutions. Mercer’s investment services
include global leadership in investment consulting and multimanager investment management. Mercer’s global network ensures integrated, worldwide solutions for clients
that wish to establish global policies and procedures while allowing for the flexibility to accommodate local cultural, legal and regulatory requirements. The firm’s locally
based professionals are also available to serve midsize companies and to address country-specific issues and opportunities.
Marsh is the world leader in delivering risk and insurance services and solutions to clients. It provides global risk management, risk consulting, insurance broking, alternative
risk financing, and insurance program management services for businesses, public entities, associations, professional services organizations and private clients. Marsh is
organized by client, industry and risk categories to facilitate the global delivery of highly specialized products and services covering a wide spectrum of risks.

September 2009
3. Executive Summary
3.1 Remuneration Prevalence and Practices Highlights by Region
Americas Asia-Pacific
Short-term incentives are typically prevalent for professionals and above in Short-term incentives are typically prevalent for professionals and above in 12 of
all of the countries in the region. the 13 countries in Asia-Pacific. Short-term incentives are common (but not
prevalent) in Singapore.
Vacation allowances and additional salary payments are frequently
mandated in the Americas. Seventy five percent of the countries have a Additional salary payments are used frequently in eight of the countries in Asia-
mandated additional salary payment, such as a 13th month salary payment, Pacific. Four of these countries have legally mandated additional payments;
Christmas or holiday/vacation bonuses, or mandated profit sharing. Only the additional payments are common or prevalent in the other four countries.
United States and Puerto Rico do not have a mandated additional salary
payment. A majority of the countries reported that transportation allowances and car
benefits are either prevalent or common. These benefits are not typically
Annual salary reviews are common in all of the countries. mandated.
Use of formal pay structures is common – job evaluation, market data, or Annual salary reviews are common in all of the countries.
both are typically used to develop the ranges
Job evaluation is the most popular process for developing pay structures – over
The economic downturn has impacted remuneration decisions in the region – three-quarters of the countries reported using job evaluation to determine salary
salary freezes or below-average salary adjustments are anticipated in at ranges and pay structures.
least one-half of the countries.
Over half of the countries reported anticipated cost-cutting measures or salary
freezes as a result of the economic downturn.

September 2009
Eastern Europe Western Europe
Eight of nine countries have prevalent short-term incentives for professional-level Short-term incentives are typically prevalent for professionals and
employees and above. Short-term incentives are common (but not prevalent) in South above in all of the Western European countries in the survey.
Africa.
A vacation allowance is legally mandated in 13 of the 14 countries.
Unlike the other regions in the survey, additional salary payments are not Spain is the only country without a mandated vacation allowance.
commonplace in Eastern Europe, the Middle East and Africa. Additional salary
payments are only mandated in Greece and are used occasionally in Russia (13th Half of the countries in Western Europe reported prevalent or mandated
month salary) and Turkey (13, 14 and 16 month salaries are sometimes used in the additional salary payments.
market).
Annual salary reviews are common in all of the countries.
Transportation allowances are prevalent in one-third of the countries, are common in
two of the countries, and are mandated in one country (Israel). All but one country reported using job evaluations to develop and
maintain pay structures. Some countries also use market data.
Car benefits are prevalent in a majority of the countries and are common in one-third
of the countries. South Africa is the only country where car benefits are not prevalent Pay freezes, cost cutting measures, and more stringent reviews of
or common. Although a car benefit is prevalent in Israel, new tax legislation may incentive payouts are expected in over half of the Western European
significantly reduce the prevalence. countries in light of the economic conditions.
Meal allowances are prevalent in five of the countries and are common in
approximately one-third of the countries. These allowances are typically provided as
on-site dining facilities are in the form of meal vouchers for local restaurants or
canteens.
Annual salary reviews are common in all of the countries.
A job evaluation approach to pay structures is common in seven of the countries.

This approach is not common in Israel or South Africa.

September 2009
3.2 Remuneration Mix – Americas
Remuneration Mix – Remuneration Mix –

Professional-Level Employee Management-Level Employee
Base Salary Base Salary
Guaranteed Allowances Guaranteed Allowances
Variable Bonus and Commission Variable Bonus and Commission
Long-term Incentives Long-term Incentives
Benefits Benefits
Typical Practice – Multinational and Leading Local Companies Typical Practice – Multinational and Leading Local Companies
0% 20% 40% 60% 80% 100%
0% 20% 40% 60% 80% 100%
Argentina
Argentina
Brazil
Brazil
Canada
Canada
Chile
Chile
Colombia Colombia
Mexico Mexico
Puerto Rico Puerto Rico
USA USA
Venezuela Venezuela
Note: Pay mix data from Mercer's Total Remuneration Surveys (TRS). For more information on TRS: www.imercer.com/trs.

September 2009
3.3 Remuneration Mix – Asia Pacific

Variable Bonus Variable Bonus
Benefits Benefits
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Australia Australia
China China
Hong Kong Hong Kong
India India
Indonesia Indonesia
Japan Japan
Malaysia Malaysia
New Zealand New Zealand
Philippines Philippines
Singapore Singapore
South Korea South Korea
Taiwan Taiwan
Thailand Thailand
Australia: Benefits include mandatory benefit requirements only. Many employees receive a “package” of remuneration that includes multiple components (such as base salary, incentives and benefits)
from which employees can choose the proportion.
New Zealand: Base Salary includes both Base Salary and Guaranteed Allowances.
Singapore: Benefits include CPF contributions (compulsory comprehensive social security savings plan).

September 2009
3.4 Remuneration Mix – Western Europe

Benefits Benefits
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Austria Austria
Belgium Belgium
Denmark Denmark
Finland Finland
France France
Germany Germany
Ireland Ireland
Italy Italy
Netherlands Netherlands
Norway Norway
Portugal Portugal
Spain Spain
Sweden Sweden
Switzerland Switzerland
UK UK
Finland: Guaranteed Allowances include both overtime and allowances.

September 2009
3.5 Remuneration Mix – Eastern Europe, Middle East & Africa

Benefits Benefits
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Czech Rep. Czech Rep.
Greece Greece
Hungary Hungary
Israel Israel
Poland Poland
Russia Russia
Slovakia Slovakia
Slovenia Slovenia
South Africa South Africa
Turkey Turkey

September 2009
4. Definitions
The following pay elements and prevalence categories are referenced in each Country Snapshot and defined below:
Pay Elements
Short-term Incentives – Incentives provided to employees for a performance period of one year or less.
Mandated Vacation Allowance – Legally required paid time off provided to employees in addition to annual salary.
Supplemental Discretionary Vacation Allowance (on top of legal requirement) – Not legally required paid time off provided to employees in addition to
annual salary.
Additional Salary Payment – Payments provided to employees in addition to salary but independent of performance (not performance-based incentives).
Examples include 13th- or 14th-month salaries, Christmas or holiday/vacation bonuses, and mandated profit sharing.
Transportation Allowance – Payments made for transit purposes, either in the form of public transportation reimbursement or car allowances for business use
of personal autos.
Car Benefit – Company-provided cars offered to employees.
Meals Allowance – Meal benefit provided to employees (lunch vouchers, cafeteria meals, etc.).
Other Cash Allowances – Any other cash allowance provided (housing allowance, school allowance, etc.).
Frequency of Payments (in Practices section) – Intended to reflect the number of payments provided in an annual pay cycle (12 monthly payments, 13 or 14
payments corresponding to a 13th- or 14th-month salary practice, 12 months’ salary paid in biweekly installments, etc.).
Prevalence Categories: Indicate how commonly the compensation element is provided by multinational companies. Prevalence information is based on Mercer’s
global compensation surveys and Mercer consultant experience working with these companies in the local market.
Not Prevalent – Small minority of companies
Mandated – Required by law
Occasional – Less than half of companies
Common – Approximately half of companies
Prevalent – More than half of companies

September 2009

Mercer Introduction to Compensation Plans Around the World – Americas
September 2009
5. Country Snapshots
Argentina
Author: Valeria.Bohorquez@mercer.com
Peer Reviewer: Martin.Lopez@mercer.com
Observations: Companies are monitoring market evolution in salary increases every semester, due to high inflation rates. Second semester will be important because of Congress
elections in June, as trade union salary adjustments will be related to the results.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Notes and Key Trends
Not
Short-term Incentives 9 Short-term incentive eligibility rates range from 60% to 90% for the professional level and above.
Mandated Vacation Allowance 9 All companies are legally compelled to provide vacation allowance to all employees. Vacation allowance
extension is related to tenure, starting from 14 days (two weeks).
Supplemental Discretionary Vacation 9 Only for managerial levels; 21 days total (including mandated).
Allowance (on top of legal requirement)
Additional Salary Payment
Examples: 13th- or 14th-month salaries, Christmas or
9 13th-month salary payment is required by law.
holiday/vacation bonuses, mandated profit sharing, etc.
Transportation Allowance 9 Transportation allowances are not prevalent.
Car Benefit 9 Cars are typically provided to director level and above employees.
Meals Allowance 9 A large majority of companies provide meals allowances in the form of vouchers or cafeteria meals.
Other Cash Allowances 9 Other forms of cash allowances are not commonly offered by employers.
Practices
Mandatory Minimum Wage Mandatory minimum wage is ARS 1,240 per month.
Frequency of Payments Monthly (13 months).
Determination and Frequency of Salary Annually. Salary increases are typically determined based on market and performance. Most companies review salaries in March/April.
Increases Collective bargaining unit (union) has a great impact on the payroll budget. The majority of companies review salaries twice a year.
Are There Mandated Salary Increases? Not by the government; only when determined by collective bargaining agreements.
Pay Structure Currently about 35% of companies are using a job evaluation system. Labor union agreements are causing internal equity and pay structure
management challenges.
(1) Prevalence categories indicate how commonly the compensation element is provided by multinational companies. Prevalence Definitions: Not Prevalent – Small minority of companies; Mandated – Required by law; 14
Occasional – Less than half of companies; Common – Approximately half of companies; Prevalent – More than half of companies. Copyright 2009 Mercer LLC. All rights reserved.
September 2009
Brazil
Author: Fabiano.Cardoso@mercer.com
Peer Reviewers: Marcelo.Ferrari@mercer.com; Eduardo.Nasi@mercer.com
Observations: Salary increases are near or under inflation. Minimum-wage growth is over inflation. All employees must be represented by unions, including senior management. Unions are
typically organized by industry sector and/or state.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Nearly all companies provide bonus or profit sharing at all employee levels. Short-term
incentive target payouts typically range from 8% to 50% for professionals to top directors.
Mandated Vacation Allowance 9 Vacation allowance is mandatory; one-third of the monthly base salary.
Supplemental Discretionary Vacation 9 Some companies provide an additional two-thirds to complete one month of base salary;
Allowance (on top of legal requirement) however, this practice is not prevalent.
9 Companies are required to pay a vacation bonus equivalent to one-third of the employee’s
monthly wage at the time the employee goes on vacation. A 13th-month salary is also required
by law and is paid 50% at vacation and 50% at Christmas.
Transportation Allowance 9 A transportation allowance is mandated by the government.
Car Benefit 9 Company cars are commonly provided for management levels as a perquisite. It is also
common market practice to provide cars to sales force employees.
Meals Allowance 9 Meal vouchers are prevalent, with an average face value of BRL15 per day. Usually 80% to
100% is paid for by the company.
Other Cash Allowances 9 Other forms of cash allowances are not prevalent.
Practices
Mandatory Minimum Wage Mandatory minimum wage is BRL 465 per month.
Frequency of Payments Twelve months plus mandatory 13th-month salary, plus one-third monthly salary (mandated vacation bonus).
Determination and Frequency of Salary Annually. The most common dates for salary revisions are November, September or April. Annual negotiations with unions are mandatory, and
Increases collective agreements include mandated salary increases. The majority of companies adopt, apart from the collective agreement, a performance
review, normally held between January and April.
Are There Mandated Salary Increases? Yes, the annual union agreements define mandatory salary increases.
Pay Structure Companies are currently using market data, together with internal equity, as a reference for their salary structures.
September 2009
Canada
Author: Kristi.Robins@mercer.com
Peer Reviewer: Iain.Morris@mercer.com
Observations: Salary freezes due to current economic uncertainty. Executive compensation levels and increased oversight by boards and, potentially, by shareholders – “say on pay.”
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives Not 9 Short-term incentive eligibility rates range from 78% to 95% for professionals and above.
Mandated Vacation Allowance 9 Vacation entitlement is determined on a provincial and territorial basis; all provinces and territories legislate a
minimum of two weeks’ paid vacation (or 4% gross pay), except for Saskatchewan, which has a minimum of three
weeks (or 6% of gross pay). Most provinces and territories increase vacation entitlements with service, which also
varies by province and territory.
Supplemental Discretionary Vacation 9 Approximately 50% of companies provide three weeks of vacation below the executive level. Thirty-four percent
Allowance (on top of legal requirement) provide four weeks of vacation to executives. Most companies increase this with years of service or level in the
company.
Additional Salary Payment 9 Additional salary payments are not common practice.
Transportation Allowance 9 Transportation allowances are not common practice.
Car Benefit 9 Of organizations, 72% provide automobile benefits, ranging from 90% at the executive level to 25% at the
professional level. Of sales employees, 58% are eligible.
Meals Allowance 9 Meals allowances are not common practice.
Practices
Mandatory Minimum Wage Minimum wage varies by jurisdiction (each province and territory has its own labor standards legislation). Federally regulated organizations within
specific industries are covered by separate regulations. Currently, minimum wages vary from CAD 8.00 per hour to CAD 10.00 per hour.
Frequency of Payments Twelve months’ salary typically paid either semimonthly or biweekly.
Determination and Frequency of Salary Annually. Salary increases are typically based on market practices and take into account the employee’s performance and relative salary level. Most
Increases companies review salaries in January.
Are There Mandated Salary Increases? No, salary increases are not mandatory unless bargained in a collective agreement.
Pay Structure Pay structures are commonly used to manage compensation for salaried employees (less common at the executive level) and are often adjusted
annually based on market practice. Job grades are commonly used to determine incentive targets and perquisite eligibility.
September 2009
Chile
Author: Fernanda.Herrera@mercer.com
Peer Reviewer: Marcelo.Cordova@mercer.com
Observations: In terms of variable compensation, it is customary for companies to include variable incentives for most positions, considering an annual performance bonus if the position is not
eligible for sales commissions. While many of the guaranteed allowances (such as Christmas and Independence Day bonuses) are not mandated, many companies provide these allowances.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates range from 50% to 100% for professionals and above.
Mandated Vacation Allowance 9 Upon completion of one year of service, employees are entitled to 15 working days of annual vacation
leave. Upon completion of 13 years of service, one additional day of leave is provided, plus one additional
day for each block of three years’ service, up to a maximum of 35 days.
Additional Salary Payment 9 9 9 9 - A minority of companies provide a 13th-month salary.
holiday/vacation bonuses, mandated profit sharing, etc. - Less than half of companies provide a vacation bonus, which is paid when an employee takes vacation
(typically in January or February).
- Approximately 60% of the market provides an Independence Day bonus (typically paid in September) and
a Christmas bonus (typically paid in December).
- An annual payment is also mandated to all employees when a company has profits (profit sharing).
Transportation Allowance 9 Transportation allowances are commonly provided by employers.
Car Benefit 9 Company cars are typically provided to directors and above.
Meals Allowance 9 Approximately 62% of companies subsidize the cost of lunch for employees.
Other Cash Allowances 9 Other cash allowances are not typically provided.
Practices
Mandatory Minimum Wage Mandatory minimum wage is CLP 165,000 per month (effective July 1, 2009).
Frequency of Payments Twelve months.
Determination and Frequency of Salary Annually. Salary increases are most typically determined by merit and market. Using inflation in addition to merit and market is also prevalent.
Increases Reviews typically occur in January, March or April.
Are There Mandated Salary Increases? No, salary increases are not mandated.
Pay Structure Market practice (for multinational companies) is to calculate the pay structure by grades, although many companies are moving toward broad-
banding systems.
September 2009
Colombia
Author: Yahaira.Gomez@mercer.com
Peer Reviewer: Octavio.Gallardo@mercer.com
Observations: Nativity bonus and vacation allowance are common among blue-collar workers. There is a tendency to fortify benefits programs and make them flexible.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Vacation allowance of 15 days’ salary is mandated for positions with a nonintegral salary, which generally
includes professional-level employees.
Supplemental Discretionary Vacation 9 It is not a practice in the market but some companies apply this figure.
9 An additional salary payment equivalent to a month’s salary is paid 15 days in June and 15 days in
December. A one-month nativity bonus is also required for positions with a nonintegral salary.
Transportation Allowance 9 Transportation is commonly provided for commercial positions. Allowance is calculated depending on the
sector and the distance employees must travel.
Car Benefit 9 Company cars are a prevalent market practice offered by employers, typically provided only to executives.
Meals Allowance 9 Meals allowances are calculated taking into account employee’s position. The allowance can be a sum of
money or meal tickets.
Practices
Mandatory Minimum Wage Mandatory minimum wage is COP 461,500 per month.
Frequency of Payments Fourteen months by law for wages under COP 5,999,500 (minimum integral wage).
Determination and Frequency of Salary Annually. Salary increases are typically paid in the first quarter.
Increases
Are There Mandated Salary Increases? Yes, for minimum wage and integral minimum wage only.
Pay Structure Pay structures are typically designed as a result of market behavior. Wage ranks, determined by position responsibilities, are commonly used.
September 2009
Mexico
Authors: Sandra.Huertas@mercer.com; Nayeli.Navarro@mercer.com
Peer Reviewer: Ayari.Jimenez@mercer.com
Observations: Of Mexican companies, 45% have considered freezing salary increases, while 34% are reviewing their short-term incentives and 26% will reduce their bonus payments below
planned/budgeted amounts.
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility is 93%. Eligibility varies according to level: 48% of companies grant it to professionals, 60% to
supervisors/specialists, 78% to managers and 82% to directors.
Mandated Vacation Allowance 9 All companies provide vacation allowance to all employees in addition to paid time off. Minimum premium must be 25% of the base pay
corresponding to the vacation period.
Supplemental Discretionary 9 Most companies pay an extra amount above the minimum legal premium of 25% of the base pay corresponding to the vacation period.
Vacation Allowance (on top of The average percentage of base salary corresponding to the vacation period provided for executives is 68% and for non-executives is
legal requirement) 66%.
Additional Salary Payment 9 Christmas bonus is a mandated annual payment. The legal minimum is 15 days of base pay, though companies typically provide 30 days
Examples: 13th- or 14th-month salaries, of base pay. Profit sharing is a mandatory distribution of a portion of pretax profits. Companies must distribute an equivalent of 10% of their
Christmas or holiday/vacation bonuses, pretax profits among all their employees.
mandated profit sharing, etc.
Transportation Allowance 9 Transportation allowances are occasionally provided by employers.
Car Benefit 9 Car benefits are typically provided where the eligibility for general directors and directors is 80%, for managers 68%, for supervisors 37%
and for sales employees 49%.
Meals Allowance 9 Meal assistance is prevalent (87% of companies), typically in the form of cafeteria meals, which are tax-free up to a maximum equivalent of
one minimum monthly wage.
Other Cash Allowances 9 Individual savings funds formed through company contributions are prevalent. Employees can typically withdraw savings once a year or
upon termination.
Practices
Mandatory Minimum Wage Mandatory minimum wage is MXN 1,644 (per month, in economic zone “A”). Typically, companies use the minimum wage to calculate the benefits
linked or capped to it, but not as an indicator for base pay to their employees. Within a unionized environment, however, minimum wage has an
impact on some clauses contended in each labor collective contract.
Frequency of Payments Annual base salary (12 times per year).
Determination and Frequency of Salary Increases Annually. Most companies review salaries in January, March or April. Salary increases are typically determined by merit (71%) and market (26%).
Pay Structure The majority of companies use a job evaluation system and market data to determine salary ranges.
September 2009
Puerto Rico
Author: Magali.Correa@mercer.com
Peer Reviewer: Fernando.Santiago@mercer.com
Observations: Multinational organizations typically have a formal salary structure joined to a formal valuation system; these companies typically use structures provided by their headquarters
outside Puerto Rico.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates range from 58% to 90% for the professional level and
above.
Mandated Vacation Allowance 9 Vacation allowances are not mandated.
Supplemental Discretionary Vacation 9 Supplemental discretionary vacation allowances are not typically provided by employers.
9 Mandatory Christmas bonus requires employers to pay a minimum of USD 400.
Transportation Allowance 9 Transportation allowances are not typically provided by employers.
Car Benefit 9 Company car benefits are prevalent, typically provided to managers and above.
Meals Allowance 9 Meals allowances are not commonly provided by employers.
Other Cash Allowances 9 Other forms of cash allowances are not typically provided.
Practices
Mandatory Minimum Wage Mandatory minimum wage is USD 1,048 per month.
Frequency of Payments Twelve months plus USD 400 Christmas bonus.
Determination and Frequency of Salary Annually. The most common salary review dates are March or April.
Increases
Pay Structure Multinational organizations typically have a formal salary structure joined to a formal valuation system; these companies typically use structures
provided by their headquarters outside Puerto Rico.
September 2009
United States of America

Author: Bill.Strobl@mercer.com
Peer Reviewer: Susan.Haberman@mercer.com
Observations: The state of the US economy continues to be a major factor for companies making adjustments to their employee programs. The current trend is to continue to cut costs, but
also to make certain that the company keeps the right talent so it will be successful when the economic turnaround happens.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates are, on average, 51% for professionals, 73% for
management and 90% for executives.
Supplemental Discretionary Vacation 9 While many companies offer paid vacation days to employees, the number of days provided
Allowance (on top of legal requirement) usually varies by position and years of service.
Additional Salary Payment 9 Additional salary payments are not typically provided by employers.
Transportation Allowance 9 Transportation allowances are not commonly provided.
Car Benefit 9 Approximately 70% of surveyed companies provide car benefits to employees, typically for
executive, management and sales positions.
Meals Allowance 9 Meals allowances are not commonly provided by employers.
Practices
Mandatory Minimum Wage Federal minimum wage is currently USD 6.55 per hour as of July 24, 2008. It rises to USD 7.25 per hour on July 24, 2009. Many states have
minimum wages that are higher than the federal minimum wage.
Frequency of Payments Most salaried employees are paid on a biweekly or semimonthly schedule. There is a small trend toward monthly pay to reduce administrative
costs.
Determination and Frequency of Salary Annually. Most organizations determine increases based on individual performance and the overall budget allowed for salary increases.
Increases
Are There Mandated Salary Increases? Nonunion workers do not have mandated salary increases. Union workers may have a salary increase mandated in their contract, but not by a
federal/state legal mandate.
Pay Structure Most companies use some form of market-based pay structure – either traditional grades and ranges or bands with established market
reference ranges. We see a growing trend of multinationals developing globally consistent bands.
September 2009
Venezuela
Author: Ayari.Jimenez@mercer.com
Observations: There is an increasing trend in the number of companies providing variable bonuses and the number of employees eligible to receive this incentive.
Prevalence (2)
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives Not 9 9 Short-term incentive eligibility rates range from 48% to 80% for professional level and above. Companies
are required to pay the equivalent of 15% of pre-tax profits among all employees. Minimum payment is 15
days and the maximum is 120 days of base salary.
Mandated Vacation Allowance No data available.
Supplemental Discretionary Vacation No data available.
Additional Salary Payment 9 Companies are required by law to pay a vacation bonus to all employees in addition to paid vacation
time-off. The law establishes a minimum legal payment of 7 days of base salary, plus an additional day
for each year of service, up to a maximum of 21 days.
Transportation Allowance No data available.
Car Benefit 9 Approximately half of surveyed companies provided a car allowance to employees.
Meals Allowance 9 The Law of Feeding for Workers establishes the obligation to provide one balanced meal during the day.
This law covers companies with at least 20 employees, and is provided to all employees earning less
than three minimum salaries per month.
Other Cash Allowances 9 Other forms of cash allowances are not common.
Practices
Mandatory Minimum Wage Minimum salary for public and private sector workers is Bs. 614,790 per month.
Frequency of Payments 17.33 months. Annual mandatory minimum package is 12.73; nevertheless most of the companies grant 4.6 months more.
Determination and Frequency of Salary The slight majority of companies grant one salary increase a year; a significant portion review salaries twice a year. Salary increases are
Increases typically determined based on performance, market, and inflation. Salary reviews generally occur in January, April, May or June.
Are There Mandated Salary Increases? No data available.
Pay Structure The majority of companies are using a job evaluation system and market data to determine salary ranges.
September 2009
Mercer Introduction to Compensation Plans Around the World – Asia Pacific
September 2009
Australia
Author: Shamini.Vimalanathan@mercer.com
Peer Reviewer: Martin.Turner@mercer.com
Observations: Australian companies are expecting smaller operating budgets, with many applying cost-containment options such as reducing spend on fixed salary budgets and short-term incentives
and implementing pay deferrals. Companies in Australia commonly calculate the remuneration package on an aggregate of cash, the value of noncash benefits and the cost of fringe benefit tax (FBT).
The practice of combining compensation components, also known as “salary packaging,” provides flexibility for the employee to select the mix of cash and benefits portions within the agreed
compensation level. Base salary is a less reliable reference for benchmarking purposes and it is usual to reference the full fixed-package value (employment cost).
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive plans are provided for all staff categories, with 84% of companies offering a plan to
senior executives, 83% to management and 67% to technical/professional staff.
Mandated Vacation Allowance 9 Companies are required to provide at least four weeks’ annual paid holiday in each year for every
employee. Some companies still pay annual leave loading (an additional allowance of 17% of normal pay
for the period of holiday leave) to employees (typically under industrial agreements). Most companies
“cashed out” this loading by rolling it into the total package value and spreading it over annual salary.
Supplemental Discretionary Vacation 9 Supplemental discretionary vacation allowance is not typically provided by employers.
Additional Salary Payment 9 Superannuation or employer retirement contribution is required to be paid on all ordinary time earnings
Examples: 13th- or 14th-month salaries, Christmas or (including most allowances, holiday pay and incentives). The required contribution is 9% of ordinary time
earnings up to a maximum contribution of AUD 38,180 in any one quarter of the year.
Transportation Allowance 9 Of surveyed companies, 45% provide car allowance. Payments for transit to/from work are not common.
Car Benefit 9 Of surveyed companies, 78% offer company car benefits to employees. Under the packaging approach
outlined above, many companies also provide employees with access to tax-effective arrangements
through which part of the overall package is the costs of a leased vehicle for personal use.
Meals Allowance 9 Meals allowances are not typically provided by employers.
Other Cash Allowances 9 Some companies pay additional allowances to employees, most commonly under industrial agreements.
These allowances are typically for “unusual” working arrangements such as shift work, remote locations
and/or extended working hours.
Practices
Mandatory Minimum Wage Mandatory minimum wage is AUD 14.31 per hour.
Frequency of Payments Twelve months’ salary paid in monthly or biweekly installments.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on market movements and individual and company performance. Most companies
Increases review salaries at the end of the relevant financial year (commonly either June or December).
Are There Mandated Salary Increases? No. However, some collective agreements have mandated salary increases to be passed on during the life of the agreement.
Pay Structure Most companies use a combination of market pricing and job evaluation systems to obtain market data to determine salary ranges. Grade or
banding structures are common in both multinational and Australian companies.
September 2009
China
Author: Echo.Qin@mercer.com
Peer Reviewer: Wei.Zheng@mercer.com
Observations: Companies have cut merit pay increases in response to the economic crisis and taken other actions to contain and/or cut costs.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives Not 9 Short-term incentive eligibility rates range from 61% to 82% for the professional level and
above.
9 Some companies provide 13th-month pay, but employees who haven’t worked a full year may
not be eligible for 13th-month pay, or 13th-month pay will be prorated by working months.
Transportation Allowance 9 Transportation allowances are not commonly offered by employers, but still may be found in
some local companies.
Car Benefit 9 Company cars are not commonly offered by employers.
Meals Allowance 9 Companies occasionally provide meals allowances.
Other Cash Allowances 9 Other cash allowances are not commonly offered.
Practices
Mandatory Minimum Wage Varies by location. The mandatory minimum wage in Beijing is CNY 800 per month; Shanghai is CNY 960 per month. The minimum wage is net
of the social insurance employee contribution.
Frequency of Payments Most companies pay 12 months, but some still keep a 13-month pay practice.
Determination and Frequency of Salary Annually. Most companies review salaries in April and July. Increases are typically determined based on position in salary range, company
Increases performance and individual performance. The average merit increase rate remained between 8% and 10% in 2008, but it dropped down
significantly after the financial crisis began.
Pay Structure The majority of companies use a job evaluation system and market data to determine salary ranges.
September 2009
Hong Kong
Author: Ellick.Ng@mercer.com
Peer Reviewer: Katherine.Lo@mercer.com
Observations: The majority of surveyed companies provide performance-based variable bonuses.

(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Variable bonus eligibility rates are the highest for management levels (92%), followed by professionals
(85%), then staff (81%).
9 The majority of companies pay 13th-month salary.
Transportation Allowance 9 Fourteen percent of surveyed companies provide transportation allowances.
Car Benefit 9 Only 25% of surveyed companies provide company cars to their company heads. This benefit is typically
not provided to other staff.
Meals Allowance 9 Meals allowances are not typically provided by employers.
Practices
Mandatory Minimum Wage No mandatory minimum wage is imposed.

Frequency of Payments Twelve to 14 months, with 13 months being the majority among surveyed companies. Payout of 12-, 13- or 14-month salary is in accordance
with individual employment contracts.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on market trends and individual performance. The most common salary review
Increases months are April, January or July.
Pay Structure Not common in Hong Kong; only some large employers set up a formal pay structure.
September 2009
India
Author: Manisha.Chandra@mercer.com
Peer Reviewer: Gangapriya.Chakraverti@mercer.com
Observations: In light of the current economic scenario, many companies have reduced 2009 salary increase/bonus payouts from their original plans/budgets. Industries such as pharmaceuticals,
consumer goods and telecom continue to experience double-digit salary increases, while other industries such as financial services, information technology and manufacturing are seeing single-digit
increases or none at all.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 One day for every 20 days of work performed during the previous calendar year, if the employee
worked 240 days for the company the previous year, exclusive of holidays.
Additional Salary Payment 9 The Payment of Bonus Act of 1965 requires bonus payments on company profits for employees
Examples: 13th- or 14th-month salaries, Christmas or earning a basic salary less than or equal to INR 10,000, provided the employee has worked for a
minimum of 30 days in that year.
Transportation Allowance 9 Transportation allowance is provided for employees to travel between work and home.
Car Benefit 9 Car benefits typically provided to executives and key functions (for example, sales and marketing).
Meals Allowance 9 Meal vouchers are a popular compensation component in select industries.
Other Cash Allowances:
Housing Allowance 9 This allowance is for employees to pay for a rented house.
Medical Allowance 9 This allowance is provided for employees to avail themselves of a clinical medical facility.
Leave Travel Allowance 9 This allowance is meant for vacation travel of the employee and family.
Practices
Mandatory Minimum Wage Minimum wage in India differs from state to state and is defined by skill level or position and by industry.
Frequency of Payments Generally 12 monthly payments.
Determination and Frequency of Salary Increases Annually, with many companies effecting the salary increases in January or April.
Pay Structure Pay structures are linked to management grades or levels. The use of market data is increasing.
September 2009
Indonesia
Authors: Rini.Firdaus@mercer.com; Nana.Nurjanah@mercer.com
Peer Reviewer: Evy.Kriswandi@mercer.com
Observations: Mandated compensation scale specifies base salary as 75% of total fixed cash compensation, leaving the remaining 25% as the total allowances figure.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates are 70% for the professional level and above.
Mandated Vacation Allowance 9 Vacation allowance is not mandated.
Supplemental Discretionary Vacation 9 Few companies provide this type of allowance to all levels of employees; up to one month base salary,
Allowance (on top of legal requirement) once per year.
9 The 13th-month salary is a statutory requirement.
Transportation Allowance 9 Monthly transportation allowances are typically provided.
Car Benefit 9 Common for management level and above, and occasional for professional level.
Meals Allowance 9 Common for professional/staff levels; occasional for management level; not typical for top management.
Phone Allowance 9 Phone allowance prevalence varies by level.
Position Allowance 9 Position allowance prevalence varies by level.
Practices
Mandatory Minimum Wage Mandatory minimum wage for Jakarta (the country’s capital city) is IDR 1,069,865 per month.
Frequency of Payments Thirteen months; the 13th-month is a statutory requirement.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual performance, position in salary range, company performance and the
Increases inflation rate. Most increases occur in January, March or April.
Pay Structure The common approach is to use either job evaluation or an internal grade system and/or market data to determine salary ranges.
September 2009
Japan
Author: Koji.Kimura@mercer.com
Peer Reviewer: Hiroshi.Terada@mercer.com
Observations: In the past, Japanese companies merely constricted their compensation level. However, due to the recent financial crisis and economic downturn, some Japanese companies
have no choice but to stop salary increases or cut employees in order to survive, a step considered as "prohibited strategy" in Japanese traditional management style.
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Vacation allowances are prohibited by statute except in case of termination. Paid holiday is mandatory,
depending on tenure of employee, starting from 10 days.
Supplemental Discretionary Vacation 9 Supplemental discretionary vacation allowance is not typically provided by employers.
Additional Salary Payment 9 Additional salary payments are not typically provided by employers.
Transportation Allowance 9 Typically, companies provide for 100% of an employee’s commuting costs.
Car Benefit 9 Typically, company car benefits apply only to senior executives. Sometimes this benefit is provided to sales
professionals, but only for business use.
Meals Allowance 9 Meals allowances are occasionally provided by employers.
Position Allowance 9 Position allowance is provided according to assignment for a post. Usually applied at a level that reflects
position and regular remuneration.
Family Allowance 9 Family allowance is provided according to the number of dependent family members. Many companies
reduce non-job-related allowances, but some companies enrich family allowance as a countermeasure to
the falling birthrate.
Housing Allowance 9 Housing allowance or company housing is provided for relocated employees. Allowance amounts may vary
by employee level and region.
Single Transfer Allowance 9 More than half of companies provide for both managers and nonmanagers.
Practices
Mandatory Minimum Wage Minimum hourly wage determined by prefecture and industry (if no appropriate industry category, JPY 766 is applied in Tokyo).
Frequency of Payments Annually. 12 months, plus many companies provide a bonus twice a year, usually in June and December.
Determination and Frequency of Salary Annual salary increases are generally based on annual performance (individual and company) and market; salary increases are generally
Increases associated with grade advancement. Salaries are most commonly reviewed in April.
Pay Structure Position-based pay has become common in determining base pay, although seniority-based pay still remains in some corporations.
September 2009
Malaysia
Author: Mona.Wong@mercer.com
Peer Reviewer: Richard.Yu@mercer.com
Observations: The majority of companies (91%) provide performance-based variable pay to employees. Fifty-one percent of organizations have a compensation mix policy.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives Not 9 Short-term incentive eligibility rate is about 75% for professionals and above.
Mandated Vacation Allowance 9 Vacation allowance is not mandated.
9 Some companies have a 13-month salary (that is, an annual salary with a one-month contractual bonus).
Transportation Allowance 9 Transportation allowances are commonly provided to professional sales and top management levels.
Car Benefit 9 Company cars are typically provided to top management and management levels.
Meals Allowance 9 Typically, most companies do not provide a meals allowance. Some companies provide a meals allowance
only in instances of overtime.
Phone Allowance 9 Phone allowances are commonly provided to professional sales and top management-level employees.
Practices
Mandatory Minimum Wage No mandatory minimum wage is imposed.

Frequency of Payments Generally, 12 monthly payments. Some companies have a 13-month salary (that is, with one month contractual bonus).
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual performance and market trend. Reviews are typically held in January or
Increases April.
Are There Mandated Salary Increases? Applicable only to unionized environment for paraprofessional/blue-collar category.
Pay Structure Companies use the job evaluation system and market data to determine salary ranges.
September 2009
New Zealand
Author: Sharon.Spence@mercer.com
Peer Reviewer: Martin.Turner@mercer.com
Observations: In response to the recession in New Zealand, organizations are forecasting a significant reduction in remuneration review budgets for the next year. The year prior to February
2009 saw increases around 5%; forecasts are now around 2%. Organizations are working to find ways to reduce costs and increase productivity and efficiency.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive plans are most common for the senior executive and management job families
(81%) and have become increasingly popular in other staff categories (65% to 74%).
Mandated Vacation Allowance 9 Four weeks’ annual leave is mandated.
Supplemental Discretionary Vacation 9 Of organizations, 14% to 18% offer additional leave entitlements beyond the four weeks, and at the
Allowance (on top of legal requirement) median employees must work 10 years before becoming eligible for the additional leave.
Additional Salary Payment 9 An additional salary payment is not a common market practice.
Transportation Allowance 9 It is common practice to reimburse employees for business use of their private vehicle.
Car Benefit 9 Of organizations, 68% to 70% provide a car or vehicle allowance to CEOs/senior executives. It is less
common for operations/support (29%) and technical/professional roles (52%).
Meals Allowance 9 Cafeteria is more common in manufacturing for waged workers, but not typical for salaried workers.
Other Cash Allowances 9 Of organizations, 59% to 65% offer subsidized health/medical insurance for employees, usually a
standard plan provided by a private health insurer.
Practices
Mandatory Minimum Wage The minimum wage for employees age 16 years and older is NZD 12.50 an hour before tax. There is no statutory minimum wage for employees
who are under 16 years old.
Frequency of Payments Mostly weekly for hourly paid workers; biweekly or monthly for salaried workers.
Determination and Frequency of Salary Typically annually and based on market movements and individual performance. Reviews are typically held in January, April or July.
Increases
Pay Structure Common approaches to managing pay are job evaluation, benchmarking, and classification or career bands.
September 2009
Philippines
Author: Renita.Baguisi@mercer.com
Peer Reviewer: Floriza.Molon@mercer.com
Observations: The 13th-month pay is not required for managerial levels, but many companies no longer distinguish pay by level and are giving all employees this payment.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Additional Salary Payment 9 Employers are required to pay an extra month’s salary (13th-month pay) for rank and file
employees.
Transportation Allowance 9 Of surveyed companies, 25% provide a transportation allowance.
Car Benefit 9 Of surveyed companies, 59% provide a car benefit to top management, management and
professional sales levels.
Meals Allowance 9 Approximately 33% of companies provide a meals allowance.
Housing Allowance 9 The Home Development Mutual Fund (Pag-IBIG) provides housing and other loans to
members.
Practices
Mandatory Minimum Wage Minimum wage rates are set by Regional Tripartite Wages and Productivity Boards, and vary per region. For the National Capital Region
(including Manila), the minimum wage rate is PHP 382 per day.
Frequency of Payments Companies are mandated to pay employees an additional month’s salary per year, or a 13th-month pay. The 13th-month pay is not required
for managerial employees, but in practice, companies no longer distinguish payment by career level and are giving all employees 13th-month
pay.
Determination and Frequency of Salary Salary increases are typically given annually. The amount of salary increase is determined by market movements, individual performance and
Increases overall organizational performance. Most companies review salaries in January or April.
Are There Mandated Salary Increases? No, salary increases are not mandated. Companies are required to comply with the mandatory minimum wage.
Pay Structure Some companies use a job evaluation system and market data to determine salary ranges. Most companies use career bands.
September 2009
Singapore
Author: June.Ng@mercer.com
Peer Reviewer: Benny.Tan@mercer.com
Observations: Fixed base pay is still the norm, despite government efforts to increase variable compensation elements. However, in the current economic climate, some companies are cutting or
freezing annual salary increases and variable bonus payouts.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Sales incentives are provided, ranging from 16.3% to 52.1% for the professional sales level. Short-term incentives
are not commonly provided to other employee levels. Variable bonuses are typically provided to all levels of
employees.
Additional Salary Payment 9 An annual wage supplement is typical practice and is generally paid in December.
Transportation Allowance 9 Transportation allowances are commonly provided to professional sales and top management-level employees.
Car Benefit 9 Some companies provide motor vehicles to top management levels (25% of surveyed companies) and
professional sales employees (23% of surveyed companies).
Meals Allowance 9 Some provide meals allowance to staff/paraprofessional levels (9% of surveyed companies).
Job-Based Allowance 9 Job-based allowances typically provided to staff level (61% of surveyed companies).
Phone Allowance 9 Some companies provide phone allowances, most commonly to professional sales employees (28% of surveyed
companies).
Practices
Mandatory Minimum Wage There is no mandatory minimum wage.

Frequency of Payments A majority of companies provide 13 months’ pay.
Determination and Frequency of Salary Annually. Most companies review salaries in January or April.
Increases
Pay Structure Companies tend to use an evaluation system, which may be based upon a point system or some kind of internal assessment.
September 2009
South Korea
Authors: Jin.Seok.Park@mercer.com ; Grace.Cha@mercer.com
Peer Reviewer: Andy.Park@mercer.com
Observations: There is a trend to integrate allowances into base pay or to abolish allowances completely; types of allowances offered vary by industry. Also, multinational corporations are
trying to revise pay grade linked with market price, using job evaluation tools.
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates range over 80% in professional and upper levels. Around 95% of
companies have a policy about a short-term incentive plan.
Mandated Vacation Allowance 9 Under the Labor Standards Act, an employee who works a full year with at least 80% attendance must get
at least 15 days of annual paid leave. However, there is no vacation allowance.
Supplemental Discretionary Vacation 9 There is no provision for discretionary vacation allowance in the Labor Standards Act.
Additional Salary Payment 9 Vacation bonuses are not mandated under the Labor Standards Act and are typically not provided by
Examples: 13th- or 14th-month salaries, Christmas or employers. Just over 60% provide coupon/cash (not additional salary) to employees on Lunar New Year's
holiday/vacation bonuses, mandated profit sharing, etc. Day and Korean Thanksgiving holidays.
Transportation Allowance 9 Companies are generally split on providing transportation and car allowances.
Car Benefit 9 More than 80% provide company car benefits to employees.
Meals Allowance 9 This is a typical benefit for employees. Related expenses are an allowable deduction for the company.
Meals allowance up to KRW 100,000 per month is tax-free for employees.
Other Cash Allowances 9 Family, license, senior title and long-service allowances are sometimes provided by employers.
Practices
Mandatory Minimum Wage Statutory minimum wage rate for the period of January 1, 2008, to December 31, 2008, was KRW 3,770 per hour.
Frequency of Payments Twelve months. Some companies offer 18 payments a year for annual salaries, although providing 12 monthly payments is more common.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on market and performance (individual and company). Most companies review
Increases salaries in January, March or April.
Pay Structure Seniority-based pay remains a key pay structure in Korean companies, though job evaluation is becoming prevalent in multinational companies.
Korean job titles (Sawon-Daeri-Kwajang-Chajang-Bujang, etc.) are still prevalent.
September 2009
Taiwan
Author: Ines.Chan@mercer.com
Peer Reviewer: Jacqueline.Ho@mercer.com
Observations: In 2009, almost 50% of surveyed companies have implemented a salary freeze in response to the economic downturn. The cash compensation mix between guaranteed pay
and variable cash for different levels of employees is relatively stable.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Sales incentives are most commonly provided for the professional sales level (99% of surveyed companies).
Variable bonuses are typically provided to all levels of employees.
Mandated Vacation Allowance 9 Under the Labor Standards Act, an employee who works for a certain period of time will be granted annual paid
leave: seven days for the services of more than one year but less than three years; 10 days for the service of
more than three years but less than five years; 14 days for the service of more than five years but less than 10
years; one additional day for each year of service over 10 years, up to a maximum of 30 days.
Additional Salary Payment 9 One or two months’ fixed bonus, typically paid in January and February to match the Chinese New Year.
Transportation Allowance 9 Transportation allowances are normally provided for business purposes and in general for executives.
Car Benefit 9 Car benefits are normally provided to sales and marketing personnel.
Meals Allowance 9 Meals allowance of NTD 1,800, usually included in actual monthly base salary, is treated as tax-deductible
item.
Practices
Mandatory Minimum Wage Mandatory minimum wage is NTD 17,280 per month or NTD 95 per hour.
Frequency of Payments Typically 12, 13 or 14 months.
Determination and Frequency of Salary Annually. Salary increases are typically based on individual performance, position in salary band and company performance. Most multinational
Increases companies conduct salary reviews in January or April.
Pay Structure The majority of multinational companies use market data to determine salary ranges; few have career bands.
September 2009
Thailand
Author: Thichila.Pacharadumrongkul@mercer.com
Peer Reviewer: Nichanant.Dulsari@mercer.com
Observations: Market pricing is playing an increasing role when setting up the pay structures for multinational companies. However, for local firms, internal equity is still a major factor in
determining pay structures.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Supplemental Discretionary Vacation 9 Supplemental discretionary vacation allowance is typically not provided by employers.
Additional Salary Payment 9 Many multinational companies provide a 13th-month salary, typically paid in December.
Transportation Allowance 9 Typically provided to sales employees who are not eligible for a company car, to pay for fuel, insurance and
maintenance costs.
Car Benefit 9 A large majority of companies provide company car benefits for executives. Of those providing this benefit, a
significant portion allow employees to choose between a car and a transportation allowance.
Meals Allowance 9 Meals allowances are typically not provided by employers. However, most manufacturing companies provide a
meals allowance (cafeteria meal) for employees.
Other Cash Allowances 9 Due to Thailand’s current high inflation rate, many companies are providing employees with cost-of-living
allowances ranging from THB 200 to THB 4,000 per month.
Practices
Mandatory Minimum Wage Mandatory minimum wage varies by province, with the lowest at THB 150 per day in Payao, Pichit, Phrae and Srisaket. The highest mandatory
minimum wage is THB 203 per day or THB 6,090 per month in Bangkok and other metropolitan areas.
Determination and Frequency of Salary Annually. Salary increases are typically based on market survey as well as individual and company performance. Most companies review salaries in
Increases January or April.
Pay Structure The majority of companies use the job evaluation system and market data to determine salary ranges.
September 2009
Mercer Introduction to Compensation Plans Around the World – Western Europe
September 2009
Austria
Author: Sebastian.Karwautz@mercer.com
Peer Reviewer: Michaela.Plank@mercer.com
Observations: There is a trend to implement deferred bonus models; the topic of bonus banks is heavily discussed in Austria. Further, we have seen that many executives have had no short-
or long-term incentive payouts this year. Long-term incentive plans are revised to meet more measures than just financials. Aside from 13th- and 14th-month salaries, guaranteed cash
allowances are not common.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not Notes and Key Trends
above.
Mandated Vacation Allowance 9 In Austria, vacation allowance is 25 days.
Supplemental Discretionary Vacation 9 Employees working more than 25 years receive 30 days of vacation allowance. In the past, we
Allowance (on top of legal requirement) have seen executives receive this added value.
9 A 13th-month salary is typically paid in July; a 14th-month salary is typically paid in December.
Transportation Allowance 9 Transportation allowances are not commonly provided.
Car Benefit 9 Company cars are commonly provided, especially to management and sales staff.
Meals Allowance 9 Meals allowances are occasionally provided by employers.
Other Cash Allowances 9 Other cash allowances are not typically provided. Some executives are eligible for additional
allowances, however.
Practices
Mandatory Minimum Wage Mandatory minimum wage is covered by collective agreements, which vary by industry and company.
Frequency of Payments Fourteen months.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on company and individual performance. Most companies review salaries in January
Increases or April.
Are There Mandated Salary Increases? Yes, salary increases are mandatory as per the collective agreement of each company.
Pay Structure Most companies target the market median for pay levels.
September 2009
Belgium
Author: Maeve.McCumiskey@mercer.com
Peer Reviewer: Thierry.Laloux@mercer.com
Observations: There is a tendency among established organizations to measure their market positioning using total remuneration (direct and indirect payments) in order to demonstrate the
value of the full package to management and employees.
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentives are increasing in terms of eligibility and the target percentage; current eligibility rates
range from 50% to 86% for professional levels and above.
Mandated Vacation Allowance 9 Companies are required to pay a vacation allowance equal to 92% of an employee’s monthly salary for the
month when the allowance is paid (typically in May).
Additional Salary Payment 9 Common practice is to pay a 13th-month salary (mandatory in certain industries).
Transportation Allowance 9 There is a legal minimum transport allowance for all employees without a company car.
Car Benefit 9 Company cars are extremely common, with increasing prevalence at lower levels.
Meals Allowance 9 More than 80% of companies provide either a subsidized cafeteria or meal vouchers.
Representation Allowance 9 It is common for management and external employees to have a flat allowance deemed to cover expenses
that cannot be reclaimed through the expense report.
Telecommunications Allowance 9 Some forms of telecommunications cost reimbursement are increasing in prevalence.
Practices
Mandatory Minimum Wage Mandatory minimum wage is EUR 1,387.49 per month.
Frequency of Payments A mandatory 12.92 months. Common practice is to pay 13.92 months.
Determination and Frequency of Salary Most companies also have annual pay review, and the most common review dates are in January, March or April.
Increases
Are There Mandated Salary Increases? National collective labor agreements require an indexing of employees’ salaries in most sectors that is linked to the health index. Index
adjustment timing varies by industry.
Pay Structure Job evaluation and relatively narrow “traditional” bands are still common. There is a trend among multinational organizations to move toward
broad bands and market pay. Pure market pay is not generally practiced.
September 2009
Denmark
Author: Cecilia.Lonning@mercer.com
Peer Reviewer: Jon.Sannes@mercer.com
Observations: Salary increases have been lower than usual, reflecting the financial crisis. Also, payouts from short-term and long-term incentive programs have decreased, just as such
programs are generally being revised to reflect a greater focus on performance.
Prevalence (1)
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives 9 Short-term incentives are relatively common for professional levels and above (eligibility rates range from
40% to 75%).
Mandated Vacation Allowance 9 Vacation entitlement is accrued at the rate of 2.08 days per month of work. Salaried employees are entitled
to 25 vacation days per year, paid at their normal salary. In addition, a mandatory vacation allowance of 1%
of base salary applies.
Supplemental Discretionary Vacation 9 Some companies pay an additional vacation allowance of 0.5% to 1.0% of base salary.
Additional Salary Payment 9 Salaried employees receive vacation bonus pay at 1% of their earnings from the previous income year (see
Examples: 13th- or 14th-month salaries, Christmas or above).
Transportation Allowance 9 Transportation allowances are not commonly offered by employers.

Car Benefit 9 Car benefits are prevalent either as a cash allowance or, for higher management, a company car.
Meals Allowance 9 Allowances are not prevalent; however, many companies subsidize cafeterias.
Practices
Mandatory Minimum Wage Legislation does not set minimum income levels. Minimum salaries are determined by collective agreements.
Frequency of Payments Twelve salary payments per year.
Determination and Frequency of Salary Salaries are commonly reviewed on an annual basis, typically in January or April. Increases are typically determined based on individual
Increases performance for nonunionized positions. Unionized positions are covered by collective agreements.
Are There Mandated Salary Increases? Only for unionized positions. For nonunionized positions, a salary review may be required (as per the individual’s labor contract); however, this
review could end with 0% regulation, as has been the case in many companies this year.
Pay Structure The majority of top companies use a job evaluation system. Point factor evaluations are increasingly being used to build HR infrastructure.
September 2009
Finland
Author: Vesa-Pekka.Lankinen@mercer.com
Peer Reviewer: Kimmo.Sollo@mercer.com
Observations: During the economic downturn, cost-effectiveness and alternative work arrangements have been the major trends in Finland. The roles of variable pay and pay for performance
continue to be increasingly important, and companies have been reviewing their incentive systems recently.
Prevalence (1)
Occasiona
Mandated
Prevalent
Prevalent
Common
Not
l
Short-term Incentives 9 Short-term incentive eligibility rates range from 78% to 100% for professional levels and above.
Mandated Vacation Allowance 9 According to the Annual Holidays Act, an employee has a right to receive at least his/her regular or average
pay for the time of his/her annual holiday. Most collective agreements provide for holiday bonuses on top of
normal pay during vacation days.
Additional Salary Payment 9 Most collective agreements provide for holiday bonuses on top of normal pay during vacation days. This
Examples: 13th- or 14th-month salaries, Christmas or usually amounts to an extra 0.6% of a month’s pay.
Transportation Allowance 9 Transportation vouchers are a new kind of employment benefit offered by employers to compensate for the
use of public transportation between home and workplace.
Car Benefit 9 Car benefit eligibility rates range from 46% to 100% for the professional level and above.
Meals Allowance 9 Luncheon vouchers or subsidized cafeteria meals are common benefits. If it is not connected with a special
agreement with a restaurant/cafeteria, the lunch benefit can be given in the form of a luncheon voucher.
Other Cash Allowances 9 To an increasing extent, subsidized sports activities are common benefits. Subsidized sports activities are a
tax-exempt employment benefit, if they are reasonable in amount and the benefit is available to all
employees.
Practices
Mandatory Minimum Wage There is no mandatory minimum wage determined by law. The basis for determination of salaries is found in collective agreements.
Frequency of Payments Twelve months plus vacation pay (12.6 months total).
Determination and Frequency of Salary Annually. Merit salary increases are typically determined based on individual performance. The majority of organizations review salaries once a
Increases year, generally in March or April.
Are There Mandated Salary Increases? No. General salary increases are agreed upon in collective agreements; in 2009, increases have varied by industry.
Pay Structure The large majority of companies use a job evaluation system to determine pay structure. There is a trend toward more flexible pay structures
(still based on job evaluation system) and segmentation.
September 2009
France
Author: Bruno.Fourage@mercer.com
Peer Reviewer: Jean-Pierre.Magot@mercer.com
Observations: The disclosure for top executive remuneration in French-listed companies has caused a constraint on compensation management.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 The statutory annual vacation is five weeks. The law provides for five weeks of paid vacation (that is, 30 days plus
Sundays). From May 1 to October 31 employees should take at least 12 consecutive days (plus Sundays).
Supplemental Discretionary Vacation 9 On top of mandated vacation, there is the possibility of having a certain number of additional days off.
Allowance (on top of legal requirement) Implementation and number of days depend on the company or the collective bargaining agreement.
9 Additional salary payments are not typically provided.
Transportation Allowance 9 Partial public transportation reimbursement is mandated. The rate of reimbursement varies according to region.
Car Benefit 9 Company car benefits are a prevalent market practice, typically provided to executives, management and sales
professionals.
Meals Allowance 9 Meals are commonly provided, typically in the form of lunch vouchers or cafeteria facilities.
Practices
Mandatory Minimum Wage EUR 1,321 per month.

Frequency of Payments Twelve or 13 months per year.
Determination and Frequency of Salary Annually. Reviews are typically held in January, April or March to determine pay structures.
Increases
Are There Mandated Salary Increases? There is no obligation on the increase itself, but there is on the negotiation around it. The employer must have an annual salary negotiation even if it
doesn’t result in an agreement with the union.
Pay Structure A job evaluation system is commonly used in the marketplace.
September 2009
Germany
Author: Silke.Zimmermann@mercer.com
Peer Reviewer: Wolfgang.Rothe@mercer.com
Observations: There is a strong tendency to skip the salary increase in 2009 or grant very moderate salary increases, especially for nonexempt employee groups. Many companies postponed
their salary increase to the second half of 2009. Many companies also are in the process of reviewing their bonus payouts for 2009. There is also an increased trend toward a more disciplined
approach to target setting – clearly defined threshold, target and maximum performance requirements.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Mandated Vacation Allowance 9 Vacation allowance for 26 days is mandated.
Supplemental Discretionary Vacation 9 It is very common among most companies in Germany to provide four additional days (30 paid days total)
Allowance (on top of legal requirement) of vacation to all employee groups.
Additional Salary Payment 9 Approximately half of companies provide a Christmas allowance to nonexempt employees. Many
Examples: 13th- or 14th-month salaries, Christmas or companies include the Christmas and vacation payments in the regular annual base salary (and continue
to pay a 12-month salary).
Transportation Allowance 9 The provision of a transportation allowance is not common.
Car Benefit 9 Company cars are commonly provided to management staff.
Meals Allowance 9 The provision of a meals allowance is not common.
Other Cash Allowances 9 Other cash allowances are not common.
Practices
Mandatory Minimum Wage There is no statutory minimum income level by law. The minimum income level varies according to the branch of industry, as well as according
to different collective agreements. There are discussions under way about the implementation of a mandatory minimum wage.
Frequency of Payments The trend is typically 12 months.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual and company performance, if not determined by collective agreement.
Increases Reviews most commonly occur in January or April.
Are There Mandated Salary Increases? There is no specific salary increase mandated by law. The salary increase level varies according to the branch of industry, as well as according
to different collective agreements.
September 2009
Ireland
Author: Patricia.Lane@mercer.com
Peer Reviewer: Patrick.Robertson@mercer.com
Observations: After a prolonged period of economic growth and pay increases, many companies have implemented pay freezes for 2009, with some even implementing pay cuts – particularly in
industries that have been the hardest hit by the current economic situation (such as construction). Historically, the mix between base pay, incentives and benefits in the market was relatively stable.
However, with the current economic situation there is significant variation in pay reviews and bonus payments.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 In 98% of organizations, at least one group of employees is eligible for a variable bonus. The prevalence of
bonus eligibility increases with level in the organization.
Mandated Vacation Allowance 9 An employee is entitled to paid annual leave from an employer equal to four working weeks in a year in which
he or she works at least 1,365 hours.
Supplemental Discretionary Vacation 9 The median number of annual leave days is 23 days. It is common to increase annual leave with service.
Additional Salary Payment 9 Not prevalent.
Transportation Allowance 9 Applies to certain employee groups only, typically senior professional and manager levels and above. The trend
is toward providing the employee with the choice of a transportation allowance or a company car.
Car Benefit 9 Applies to certain employee groups only, typically senior professional and manager levels and above as well as
sales staff. The trend is toward providing the employee with the choice of a transportation allowance or
company car.
Meals Allowance 9 It is typical to provide subsidized eating facilities, meals allowances or kitchen facilities.
Practices
Mandatory Minimum Wage The national minimum wage is EUR 8.65 per hour.
Determination and Frequency of Salary Annually. Nearly all employers review salaries annually, and increases are determined by individual and company performance. Companies tend to
Increases review salaries at varying times, with most occurring in April or January.
Are There Mandated Salary Increases? No. Historically, there have been national wage agreements as part of a social partnership process. The public sector and many private-sector
companies with unions signed up for these agreements. Pay increases were negotiated on a national basis for multiyear periods. With the current
economic situation, however, there is uncertainty about future payments under negotiated agreements.
Pay Structure Companies primarily use market data and job evaluation to determine pay levels.
September 2009
Italy
Author: Laura.Saldarini@mercer.com
Peer Reviewer: Marco.Morelli@mercer.com
Observations: The full impact of the crisis in compensation is still to come. Companies are waiting to see their peers’ changes and the consequences of the economic downturn. Short-term incentives
are introduced for professional level and above, usually as a balance scorecard; a few financial companies are introducing deferred compensation. Long-term incentive plans for key professional roles and
managers are more widespread and performance-based. For all employees, companies are trying to deliver more value through benefits in order to be more efficient.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives 9 Short-term incentive eligibility rates range from 71% to 98% for professional level and above. There is a strong
emphasis on the linkage between company and business performance and individual incentives.
Mandated Vacation Allowance 9 Vacation allowance values are set in the collective agreement applied by the company.
Additional Salary Payment 9 Nearly all companies provide a vacation bonus (13th-month salary) to all employees, but some companies also
Examples: 13th- or 14th-month salaries, Christmas or provide a 14th-month salary. In general the additional payment (13th and/or 14th) is mandated, as set in the
collective agreement applied by the company.
Transportation Allowance 9 Transportation allowances are not commonly provided by employers.
Car Benefit 9 Company cars are usually provided to top and senior management and managers, and only in some case for
sales staff.
Meals Allowance 9 A majority of companies provide lunch vouchers or cafeteria meals, as set in the collective agreement applied by
the company.
Other Cash Allowances 9 Executive education allowances are sometimes provided to senior management or high-potential employees.
Practices
Mandatory Minimum Wage Mandatory minimum wage varies by the collective agreement used.
Frequency of Payments Monthly (12 months plus 13th- or 14th-month salaries, depending on collective agreement).
Determination and Frequency of Salary Annually. Individual performance is the most common criterion for salary increase. For managerial roles, company and division performance are also
Increases frequently used. The most common salary review dates are in April or January.
Pay Structure The majority of companies are using a job evaluation system and market data to determine salary ranges. A significant portion of the Italian large
multinationals use a global grading system.
September 2009
Netherlands
Author: Denise.Tollens@mercer.com
Peer Reviewer: Jelderik.Schutz@mercer.com
Observations: Due to economic circumstances, many companies have frozen salaries and reduced recruitment activities.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Mandated Vacation Allowance 9 Employees get a mandated 20 vacation days. All companies provide vacation allowance, typically 8%
of annual base salary, paid in May.
Supplemental Discretionary Vacation 9 It’s very common to give five days (average) on top of mandated vacation.
Additional Salary Payment 9 Some companies also provide a guaranteed 13th month.
Transportation Allowance 9 Transportation allowances are commonly provided to professional and staff employees without a
company car. Car allowances are typically provided to top management levels.
Car Benefit 9 Company cars are common at management levels, with increasing prevalence at lower levels
(especially sales positions).
Meals Allowance 9 It is not common practice to provide meals allowances to employees.
Other Cash Allowances 9 A representation allowance is occasionally given. Other cash allowances are typically not provided by
employers.
Practices
Mandatory Minimum Wage Mandatory minimum monthly wage for employees of 23 years and older is EUR 1,381,20.
Frequency of Payments The frequency is 12.96 times monthly base salary (including the 8% holiday allowance). Some companies also provide a guaranteed 13th month, which
makes the total13.96.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual performance and position in salary range. Most companies review salaries in
Increases January or April.
Are There Mandated Salary Increases? No, only if part of an existing collective labor agreement (common for paraprofessionals/blue-collar employees).
Pay Structure Industrywide and company collective labor agreements are common in the Netherlands; these provide for graded salary structures and minimum salary
levels for employees. These salary structures have typically been based on a (point factor) job evaluation methodology. Even if a collective bargaining
agreement does not apply, the vast majority of large companies have point factor job evaluation systems in place.
September 2009
Norway
Author: Merete.Haugan@mercer.com
Peer Reviewer: Nils.Sjostrom@mercer.com
Observations: There is a strong focus on total remuneration and having a holistic approach to rewards. Due to a large decline in expected salary increases in 2009, companies have focused
more on training, development and careers. We still see an increase in the use of variable bonuses and higher eligibility rates for lower-level employees.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Vacation allowances are typically provided by employers. All employees are entitled to vacation allowance. The
vacation allowance is between 10.2% and12.5% of base salary for the previous year, depending on the age of the
employee.
Additional Salary Payment 9 Additional salary payments are sometimes provided to employees.
Transportation Allowance 9 Transportation allowances are mandated by the government.
Car Benefit 9 Company car benefits are common for executives and sales staff and occasionally provided to other levels.
Meals Allowance 9 Companies commonly substitute due to tax regulations.
Practices
Mandatory Minimum Wage There is no law regarding a minimum income level. However, the main agreement (hovedavtalen) between two unions, LO (Landsorganisasjonen i
Norge) and NHO (Næringslivets hovedorganisasjon), is a commonly used indicator. Currently, the minimum level for office workers is NOK 220,176 per
year, and for shop steward, which is considered among the lowest paid jobs, it is NOK 196,116 per year.
Frequency of Payments Annually. Twelve months with monthly payouts.
Determination and Frequency of Salary The majority of organizations review salaries once a year, typically in January or April for multinational companies and July for Norwegian companies.
Increases Salary increases are typically determined based on individual performance.
Are There Mandated Salary Increases? No, but in industries with large unions, companies need to follow the collective agreement between the LO and NHO unions.
Pay Structure It is common for large organizations to use a job evaluation system, but this practice is increasing among all companies in the market.
September 2009
Portugal
Author: Marioneta.Ledo@mercer.com
Peer Reviewer: Sandra.Rebelo@mercer.com
Observations: The majority of companies are likely to reduce salary increases in 2009 from those originally budgeted.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Short-term Incentives Not 9 Of companies surveyed, 90% pay an annual variable bonus to employees.
Mandated Vacation Allowance 9 The vacation entitlement is 25 workdays (excluding weekends and national holidays); this number can be
decreased by one to three days, depending on the employee’s absenteeism.
Additional Salary Payment 9 Mandated 13th- and 14th-month salaries related to holidays and Christmas.
Transportation Allowance 9 Transportation allowances are not commonly offered by employers.

Car Benefit 9 Of the companies surveyed, 92% provide a company car to their employees. Company cars are common at
management levels, with increasing prevalence at lower levels (especially in sales). Of companies
surveyed, 84% provide company cars for business and personal use to their senior management,
junior/middle management and sales force.
Meals Allowance 9 Meals allowances are commonly provided and are paid monthly, in accordance with the number of days
worked throughout the month.
School Allowances 9 Nursery tickets and school allowances are provided by some companies.
Length of Service Allowance 9 A majority of companies provide length of service allowances per sector requirements.
Practices
Mandatory Minimum Wage Mandatory minimum wage is EUR 450 per month.
Frequency of Payments Fourteen payments per year.
Determination and Frequency of Salary Annually. The majority of companies review salaries once a year, typically in January, March or April. Salary increases are commonly based
Increases upon individual company performance and inflation.
Are There Mandated Salary Increases? Only if an agreement exists between employer and employees.
Pay Structure Companies commonly use market data to determine salary ranges.
September 2009
Spain
Author: Marta.SanchezAmbrona@mercer.com
Peer Reviewer: Guillermo.Rademakers@mercer.com
Observations: A small percentage of companies have a flexible compensation policy, although this is increasing. Salary review policies will tend to grant lower increases, because of the
economic environment.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Vacation allowances are not mandated and are not commonly provided.
Supplemental Discretionary Vacation Supplemental discretionary vacation allowances are not typically provided by employers.
9
Additional Salary Payment There are 13th- and 14th-month salaries, with one typically paid in the summer and one at Christmas. Most
Examples: 13th- or 14th-month salaries, Christmas or 9 collective agreements make these payments compulsory.
Transportation Allowance 9 Some companies provide bus passes for employees, but transportation allowances are not prevalent.
Car Benefit Of companies surveyed, 84% have a car policy implemented (not cash-based), mainly for their top managers and
9 sales force. The replacement period depends on the kilometers and years (normally three to four years). The
prevalent practice for the acquisition of the car is renting.
Meals Allowance 9 The majority of companies offer a meal subsidy in the form of cafeterias, luncheon vouchers or a sum in euros.
Other Cash Allowances Housing allowance (renting) has become an occasional practice. Nursery tickets and school allowances are also
9
provided by companies.
Practices
Mandatory Minimum Wage Mandatory minimum wage is EUR 624.

Frequency of Payments Fourteen months (12 monthly payments plus two extra payments in summer and Christmas). Some companies are rolling the 14 payments into 12 in
order to simplify personnel administration.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on market and performance. Most companies review salaries in January.
Increases
Are There Mandated Salary Increases? The collective agreement defines mandatory salary increases for nonexempt positions, usually linked to the Consumer Price Index. Exempt positions
have no mandatory salary increase, as their base salary is higher than that defined by the collective agreement.
Pay Structure Job market benchmarks, job pricing and/or job evaluation systems are spreading, leading to salary bands/pay ranges management. For
blue-collar workers, local agreements and job categories are still being used.
September 2009
Sweden
Author: Simon.Persson@mercer.com
Peer Reviewer: Mattias.Klefback@mercer.com
Observations: Due to the economic downturn, unemployment is rising and GDP growth is slowing down. The durable goods industry has been struck the hardest, and due to the concentration
of this industry in the southwest region of Sweden, unemployment has risen fastest in that area. Short-term incentives are increasingly prevalent throughout all levels of the organization.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Mandatory vacation payment valued at 20% of one month’s salary is paid to employees when
they take the vacation.
Supplemental Discretionary Vacation 9 Additional vacation allowance is not prevalent. However, employees who are not entitled to
Allowance (on top of legal requirement) overtime pay usually get five additional days of vacation.
9 An additional salary payment is not common practice.
Transportation Allowance 9 Transportation allowances are not common practice.
Car Benefit 9 Company car eligibility ranges from 37% to 97% for the professional level and above.
Meals Allowance 9 Some companies provide luncheon vouchers or have lunchrooms with subsidized meals.
Practices
Mandatory Minimum Wage Regulated by collective agreements.

Frequency of Payments Twelve months per year.
Determination and Frequency of Salary Annually. Salary increases are largely based on individual performance. Company performance, job level and position in salary range are also
Increases strong factors in determining salary increases. Most companies review salaries in January or April.
Are There Mandated Salary Increases? No. Salary increases are largely regulated by collective agreements.
Pay Structure Currently, almost all companies are using a job evaluation approach for market salary references and creation of pay ranges. For lower blue-
and white-collar jobs, collective agreements still have a considerable impact.
September 2009
Switzerland
Author: Silke.Zimmermann@mercer.com
Peer Reviewer: Wolfgang.Rothe@mercer.com
Observations: There is a strong tendency to skip the salary increase in 2009 or grant very moderate salary increases, especially for nonexempt employee groups. Many companies postponed
their salary increases to the second half of 2009. Many companies are also in the process of reviewing their bonus payouts for 2009.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates range from 43% to 98% for the professional level up to executive level.
Mandated Vacation Allowance 9 Vacation allowances of 20 days are mandated by law.
Supplemental Discretionary Vacation 9 It is very common (among most companies in Switzerland) to provide 25 paid days for vacation to all
Allowance (on top of legal requirement) employee groups.
Additional Salary Payment 9 Employers occasionally provide a 13-month salary, usually paid in December. Many companies include the
13th payment in the regular annual base salary and pay a 12-month salary.
Transportation Allowance 9 The provision of a transportation allowance is not common.
Car Benefit 9 Company cars are typically limited to management and sales staff.
Meals Allowance 9 The provision of a meals allowance is not common.
Other Cash Allowances 9 Medical allowances are occasionally provided by employers.
Practices
Mandatory Minimum Wage Switzerland has no statutory minimum wage or any tradition of government interference in pay. Some basic rates are stipulated in collective
agreements, but companies have considerable freedom to determine their own pay arrangements.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual performance. Many companies also factor in company performance.
Increases Salary reviews typically occur in January or April.
Are There Mandated Salary Increases? No, salary increases are not mandated by law.
September 2009
United Kingdom
Author: Vicky.Lewis@mercer.com
Peer Reviewer: Mark.McGowan@mercer.com
Observations: Up to half of UK companies have implemented pay freezes in 2009, with the most affected workforce segments being management and executives. However, the majority of
companies are budgeting salary increases for 2010.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term incentive eligibility is 75% for professional levels and above. Target bonus levels range from
Short-term Incentives 9 2% to 50%, with maximum target bonus levels of 90%. Actual bonus levels paid stand at 0% to 50% of base
salary.
Mandated Vacation Allowance 9 Employees are entitled to 28 days’ annual leave, which includes public holidays.
Supplemental Discretionary Vacation 9 Companies provide 23 – 25 days’ basic allowance (plus eight permanent bank and public holidays), with
Allowance (on top of legal requirement) additional leave being granted for length of service or seniority.
9 Additional salary payments are not commonly provided by employers.
Transportation Allowance 9 Transportation allowances are not a typical market practice.
Car Benefit 9 At management and senior management levels, a car benefit is provided and is typically a choice between a car
and a car allowance. Companies also provide cars to all employee levels based on business need.
Meals Allowance 9 Meals allowances are not a prevalent market practice.
Other Cash Allowances 9 Shift allowances and overtime are the most common forms of other cash payments.
Practices
Mandatory Minimum Wage Mandatory minimum wage varies by age: 22 and over is GBP 5.73 per hour, 18 – 21 years old is GBP 4.77 per hour, 16 – 17 years old is GBP 3.53 per
hour.
Determination and Frequency of Salary Annually (although recently UK companies have reviewed pay on a more frequent basis as a response to the economic climate). Individual performance
Increases is the most common criterion for salary increase. Inflation, company performance and position in salary band are also common factors. The most
common salary review months are January or April.
Pay Structure The majority of companies use job evaluation systems and market data to determine salaries.
September 2009
Mercer Introduction to Compensation Plans Around the World – Eastern Europe, Middle East & Africa
September 2009
Czech Republic
Author: Petr.Boldis@mercer.com
Peer Reviewer: Miriam.Masekova@mercer.com
Observations: The tendency to provide more than 12 payments is decreasing. Historically, 13th and 14th payments were very popular. All payments are taxable for an employee and an
employer; accordingly, there is no tax advantage to paying more than 12 payments.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Additional Salary Payment 9 Very few companies provide a 13th- or 14th-month salary.
Transportation Allowance 9 Typically provided by large companies in large cities or by manufacturing companies in remote
locations.
Car Benefit 9 Commonly granted to management levels and above and to sales employees.
Meals Allowance 9 Meal benefits are standard (provided by approximately 96% of companies). They are typically
provided as meal vouchers or subsidized meals in the company cafeteria.
Other Cash Allowances 9 Statutory allowances for overtime, shift/night allowances, allowance for work on Saturdays/Sundays
and allowance for work in hazardous environments.
Practices
Mandatory Minimum Wage Mandatory minimum wage is CZK 8,000 per month or CZK 48.10 per hour.
Frequency of Payments Twelve months. Very few companies provide a 13th- or 14th-month salary.
Determination and Frequency of Salary Annual increases are the most common practice in the market. Salary increases are determined based on both company and individual performance.
Increases Most companies review salaries in January or April.
Are There Mandated Salary Increases? No, salary increases are not mandated (except if agreed in collective agreement).
Pay Structure The majority of companies use a job evaluation system and market data to determine pay structures. Broad banding is not a market practice.
September 2009
Greece
Author: Efi Vladimirou, evlad@planet.gr
Peer Reviewer: Costas Calogirou, kkalog@planet.gr
Observations: The provision of short-term incentives is a common practice for almost all companies operating in Greece.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not 9
Short-term Incentives Short-term incentive eligibility rates range from 60% to 100% for the professional level and above (including executive
level and head of organization).
Mandated Vacation Allowance 9 Employees are entitled to a vacation allowance, which is one-half of the monthly salary (for employees paid monthly) or
13 times the daily wage (for employees paid daily).
Additional Salary Payment 9 Additional salary payments are as follows: one monthly salary at Christmas, half-monthly salary at Easter and half-
Examples: 13th- or 14th-month salaries, Christmas or monthly salary at summertime (see Mandated Vacation Allowance above).
Transportation Allowance 9 It is not common to offer a car allowance in lieu of a company car.
Car Benefit 9 Company cars are commonly provided to professional level and above.
Meals Allowance 9 There is no legal framework on such an allowance in Greece. Meal vouchers or meals allowances are an entirely
voluntary offer to employees. In practice, meal vouchers (that is, coupons) are not particularly widely used. More
common are several other forms of meals allowances (for example, discount prices for food in the company’s dining
facility or in a cooperative restaurant/snack bar, or a daily cash allowance for a meal).
Practices
Mandatory Minimum Wage Monthly wage: EUR 739. Daily wage: EUR 33.04.
Frequency of Payments Fourteen months for all employees of the organization (except employees working in the financial department, who get 15 monthly salaries).
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual performance. Typically, increases are provided in January, March or April.
Increases
Are There Mandated Salary Increases? Yes (for employees who are paid the minimum wage). Mandatory pay increases stem from collective agreements signed by representatives of employees and
employers. Each employee is bound by at least one collective agreement: national, industrial, enterprise or occupational. The national collective agreement
defines the minimum pay increase and is valid for all employees. All other collective agreements start with the national agreement as a base and may define
higher pay increases. All four collective agreements take the inflation rate into account and define the lowest legal pay increase for those employees who are paid
the minimum wage. The latter is determined by the relevant collective agreement.
Pay Structure The majority of companies use a job evaluation system in which salary increases are determined in addition to the company’s performance.
September 2009
Hungary
Author: Oxana.Nagy@mercer.com
Peer Reviewer: Edina.Davey@mercer.com
Observations: Many companies in Hungary are taking steps to face the challenges created by the economic crisis. Measures taken have a direct effect on remuneration, especially on base pay and
bonus payouts. 2009 bonus payouts are likely to be significantly lower than planned. However, companies do not plan to freeze the payout of short-term incentives. It is likely that a significant number of
companies will review performance measures in order to focus more on profit conservation.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Based on the Hungarian labor code, the amount of vacation allowance depends on an employee’s age. The
minimum is 20 days.
9 Very few companies provide a 13th- or 14th-month salary.
Transportation Allowance 9 Transportation allowances are generally part of a flexible benefits package.
Car Benefit 9 Cars are commonly granted to management level and above and to sales employees.
Meals Allowance 9 The large majority of companies provide meals allowances in the form of meal vouchers, and in most cases, this
is part of the flexible benefits package.
Other Cash Allowances 9 A school allowance is typically provided as part of the flexible benefits package.
Practices
Mandatory Minimum Wage HUF 71,500 per month. There is also a minimum wage determined for positions requiring at least a secondary education (high school); previously HUF
87,000, this monthly base salary is now HUF 87,500 (effective July 1, 2009).
Frequency of Payments Typically 12 months.
Determination and Frequency of Salary Annually. Increases are typically determined based on inflation and individual performance. Most companies review salaries in January or April.
Increases
Are There Mandated Salary Increases? In the private sector, except if it is stipulated otherwise in the employment agreement, companies have the right to decide whether they want to give pay
increases. The only regulation is that salaries cannot be lower than the legal minimum wage determined by the government.
Pay Structure About 60% of companies are using job evaluation and market data to determine salary ranges.
September 2009
Israel
Author: Moshe Zviran at zviran@tau.ac.il (Zviran Consulting and Surveys Ltd.)
Observations: Over the past few years, pay increases have been higher than inflation rates, especially in the high-tech sector. However, the global economic crisis had an impact on salary
levels across all industries in Israel, and the average salary levels are decreasing. Base pay remains the strongest component of the remuneration package, but there is an increasing role of
variable bonus and higher eligibility rates for all employee levels. Company cars are a major competitive tool in recruiting and retaining skilled employees and are more prevalent in
multinational companies. However, new legislation (revised January 2009) that imposes higher tax rates on the company car benefit might significantly reduce this prevalence.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Short-term Incentives 9 Short-term incentive eligibility rates range from 3% to 38% for the professional and above.
Mandated Vacation Allowance 9 The Annual Vacation Law determines a minimum quota of annual vacation days, ranging from 10 to 28 days,
according to employee seniority.
Supplemental Discretionary Vacation 9 Most multinational companies outperform the mandatory vacation allowance.
Additional Salary Payment 9 A 13th-month salary is not common in most companies.
Transportation Allowance 9 Mandatory by law, unless an employee has a company car or car allowance.
Car Benefit 9 Company cars are common in high-tech companies, either on top of the employee's salary or against a salary
sacrifice. The car benefit is taxed according to car category.
Meals Allowance 9 Noncash. Nearly all companies provide lunch at company dining facilities or lunch coupons for nearby
restaurants.
Other Cash Allowances 9 Convalescence allowance is mandated by law and usually paid according to a uniform tariff per day of
convalescence.
Practices
Mandatory Minimum Wage ILS 3,850. Updated periodically according to inflation rate and the change in the Consumer Price Index.
Determination and Frequency of Salary Annually. Salary increases are typically based on individual performance. Most companies review salaries in January, March or July.
Increases
Are There Mandated Salary Increases? No mandated salary increases or cost-of-living adjustments are expected in 2009.
Pay Structure Currently less than a quarter of companies are using a job evaluation system to determine salary ranges.
September 2009
Poland
Author: Aneta.Rek@mercer.com
Peer Reviewer: Malgorzata.Ciarka@mercer.com
Observations: This year, cost reductions in compensation and headcount were common practice due to the current economic situation. Salary increases were reduced or frozen by a majority
of companies. Variable pay, benefits and training programs were less affected.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
above.
Mandated Vacation Allowance 9 Vacation allowances are mandated by law. Not more than 10 years of service provides 20
working days; more than 10 years of service provides 26 working days. When determining
holiday length, the employee’s employment record includes previous employment.
Supplemental Discretionary Vacation 9 Vacation allowances and mandated vacation pay are typically provided from company social
Allowance (on top of legal requirement) funds in large organizations.
9 A 13th-month salary is not common in most companies.
Transportation Allowance 9 Transportation allowances are not common.
Car Benefit 9 Company car benefits are prevalent.
Meals Allowance 9 Meals allowances are provided by half of companies.
Other Cash Allowances 9 Overtime and shift allowance payments are mandated by law.
Practices
Mandatory Minimum Wage In 2009, mandatory minimum wage was increased to PLN 1,276.0 per month and PLN 1,020.8 for new hires at their first job.
Frequency of Payments Annually. Twelve months.
Determination and Frequency of Salary Annually. Salary increases are typically determined based on individual and company performance as well as position within salary range. Most
Increases companies review salaries in January or April.
Pay Structure The majority of companies are using a job evaluation system and market data to determine salary ranges and remuneration policies.
September 2009
Russia
Author: Valeria.Stolyarova@hcsrussia.ru
Peer Reviewer: Larisa.Muravska@mercer.com
Observations: Base pay remains the strongest component of the remuneration package for employees. Guaranteed allowances are more commonly present at the lower to middle
employment levels; these allowances are somewhat replaced by long-term incentives for senior and top management levels.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
above.
Mandated Vacation Allowance 9 Vacation allowances are mandated by law.
9 Some companies pay a 13th-month salary.
Transportation Allowance 9 Remote operations typically provide monthly transportation passes for employees not covered
by company car policies (nonmanagerial employees).
Car Benefit 9 Company cars are commonly provided to managerial levels.
Meals Allowance 9 A relatively small number of companies provide meals allowances.
Other Cash Allowances: 9 9 Shift Allowances: Companies often compensate employees on an hourly basis for working
overtime. Night shift allowances are mandated.
Practices
Mandatory Minimum Wage Minimum wage is RUB 4,330 per month.

Frequency of Payments Twelve months, with some companies paying a 13th-month salary.
Determination and Frequency of Salary Annually. Salary reviews are usually conducted once a year and typically occur in January, March or April. The basic factors considered for the
Increases increase are typically individual performance, company performance, inflation and position in salary range.
Pay Structure The majority of companies use a job evaluation system.
September 2009
Slovakia
Author: Petr.Boldis@mercer.com
Peer Reviewer: Miriam.Masekova@mercer.com
Observations: Historically, 13th- and 14th-month payments were very popular. However, since all pay is taxable to both employer and employee, the trend to provide more than 12 payments
is decreasing.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
above.
Additional Salary Payment 9 The prevalence of providing more than 12 payments is decreasing.
Transportation Allowance 9 Large companies, particularly in big cities, typically provide transportation allowances.
Car Benefit 9 Company cars are provided by a majority of companies to the sales force and management
levels and above.
Meals Allowance 9 Meals allowances are typically provided in the form of vouchers or cafeteria meals.
Other Cash Allowances 9 Statutory allowances for overtime, shift/night allowances, allowances for work on
Saturdays/Sundays, allowance for work in hazardous environments.
Practices
Mandatory Minimum Wage Mandatory minimum wage is SKK 8,100 per month.
Determination and Frequency of Salary Annually. Salary increases are determined based on company and individual performance. Reviews typically occur in January or April.
Increases
Are There Mandated Salary Increases? No, salary increases are not mandated (except if agreed in a collective agreement).
September 2009
Slovenia
Author: Dariusz.Dmowski@mercer.com
Peer Reviewer: Larisa.Muravska@mercer.com
Observations: Within remuneration mix, the role of guaranteed allowances and benefits has increased mostly among professionals. Base salary and variable bonus of executives have
increased, but benefits have decreased within the remuneration mix.
Prevalence (2)
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Mandated Vacation Allowance 9 Workers have the right to annual leave in an individual calendar year, which may not be shorter than four
weeks, regardless of whether he works full time or part time.
Supplemental Discretionary Vacation No data provided.
Additional Salary Payment 9 A small amount of companies provide a 13th month payment.
Transportation Allowance 9 Nearly all companies provide a transportation allowance to employees.

Car Benefit 9 Company car benefits are prevalent for the professional levels and above.
Meals Allowance 9 It is common practice for companies to provide meal vouchers.
Other Cash Allowances 9 Other forms of cash allowances are not common.
Practices
Mandatory Minimum Wage € 538.53 per month until the end of July 2008.
Frequency of Payments 12 months. The minority of companies provide 13th monthly wage payment, though this proportion is increasing, due to the strength of labor
unions.
Determination and Frequency of Salary Annually. Salary increases are based mainly on individual performance though inflation has a great influence. Most companies review salaries
Increases in January or April.
Are There Mandated Salary Increases? No data provided.
Pay Structure Multinational companies are generally using a job evaluation system and market data.
September 2009
South Africa
Author: Pierre Marais at plm@globalrem.co.za
Peer Reviewer: Andre Geldenhuys at jag@globalrem.co.za
Observations: More progressive employers allow employees to structure their annual remuneration in order to either elect 12 monthly salary payments or add a 13th payment, typically at year-end.
There is no tax advantage to either option. There is a trend is toward total package remuneration structuring.
Prevalence (1)
Mandated
Prevalent
Prevalent
Occasion
Common
Not
al
Short-term Incentives 9 Monthly production bonus at junior levels and annual incentives at senior levels are common.
Supplemental Discretionary Vacation 9 Trend is toward providing a total package pay structure that permits such an allowance to be voluntarily
Allowance (on top of legal requirement) “structured” by the individual.
Additional Salary Payment 9 Additional salary payments are not typically provided.
Transportation Allowance 9 Car allowances are common at the senior levels as an alternative to company cars.
Car Benefit 9 Due to a gradual move toward full taxation of all benefits, there has been a tendency to discontinue company car
benefits in favor of car allowances.
Meals Allowance 9 Typically provided by large organizations in the form of subsidized corporate lunchrooms.
Other Cash Allowances 9 For blue-collar workers in manufacturing or mining sectors, it is common to provide acting, standby or shift
allowances.
Practices
Mandatory Minimum Wage Minimums are determined by sector through statutory sector determinations (where no collective bargaining occurs) or through industry-level collective
bargaining. In the informal or small business sector, the minimum wage ranges from ZAR 1,400 to ZAR 1,500 per month. In large multinationals, the
minimum is ZAR 2,300 per month.
Frequency of Payments Mostly 12 months; occasionally 13 months.
Determination and Frequency of Salary Annually. Junior-level increases are typically determined through negotiations between employers and large industry-based trade unions. At skilled and
Increases senior levels, increases are based on local and international market movements as well as cost-of-living indices.
Are There Mandated Salary Increases? Yes. Mandatory increases apply only to nonunionized sectors, where sector determinations apply as outlined above. Current annual increase of 8%
applies.
Pay Structure At junior levels, the typical pay structure consists of guaranteed salary, fringe benefits, guaranteed allowances and nonguaranteed bonuses. At senior
levels, there has been an increasing move toward a “total package” structure in which all guaranteed cost items are included in an up-front package.
Some provision is then made for subsequent structuring of the package.
September 2009
Turkey
Author: Irem.Ayken@mercer.com
Peer Reviewer: Sibel.Yucesan@mercer.com
Observations: Transportation allowances are common due to lack of proper mass transportation facilities and the related cost to employees. As a result of relatively low inflation rates,
companies have adjusted salaries once a year in recent years.
(1)
Prevalence
Occasional
Mandated
Prevalent
Prevalent
Common
Not
Supplemental Discretionary Vacation 9 Vacation allowances are not common in the market. Companies that do provide these allowances
Allowance (on top of legal requirement) typically pay modest amounts to blue-collar employees only.
Additional Salary Payment 9 Thirteen-, 14- and 16-month salaries are used in the market. It is mostly manufacturing companies that
Examples: 13th- or 14th-month salaries, Christmas or pay 16 salaries.
Transportation Allowance 9 Many companies pay a cash allowance or provide bus transportation to and from an employee’s home. It
is also very common for companies to provide shuttle bus service.
Car Benefit 9 Company cars are very common, especially for management-level positions and up. They are also very
common for sales force employees. Cash allowances instead of company cars are not common.
Meals Allowance 9 Providing meal tickets is very common. Some companies may have in-house facilities for lunch
(generally in manufacturing units).
Other Cash Allowances 9 Other forms of cash allowances, such as a marriage allowance and a clothing allowance, are commonly
offered to blue-collar employees or employees in the manufacturing industry.
Practices
Mandatory Minimum Wage Mandatory minimum wage was gross YTL 666 per month as of January 1, 2009. This figure was updated to YTL 690 per month as of July 1,
2009.
Determination and Frequency of Salary Annually. Individual performance, inflation and company performance are the biggest factors affecting salary adjustments. Most companies
Increases review salaries in January or April.
Are There Mandated Salary Increases? Mandated salary increases are applicable only in cases where there is a unionized workforce.
Pay Structure The majority of the companies use job evaluation/grading systems and market data in setting up pay structures.
Mercer Compensation Plans Around the World
August 2009
September 2009
6. Popular Resources
Benefit and Compensation Plans Around the World (BPAW and CPAW) Global Compensation Planning Report
Designed for multinational employers, BPAW and CPAW Multinational employers the world over continue to refer
are annually updated global reference guides to to this report for hard-to-find information on salary trends
retirement and health benefit plans and compensation and key economic and labor market indices in addition to
programs in 48 countries. emerging market studies, wage analyses and economic
BPAW offers two pages per country – one page research. Our subscribers include economists,
retirement, one page health and welfare researchers, planners and policymakers, who use the
CPAW offers one page per country – compensation information to support business planning and to inform
practices and advise decision makers.
Both BPAW and CPAW full reports (all 48 countries) are http://www.imercer.com/gcpr
available to multinational companies at no charge.
Request form: http://www.mercer.com/bpaw.
Worldwide Benefit & Employment Guidelines (WBEG) The World Economic Forum Research with Mercer and the OECD
With its extensive market practice information, this report You are invited to listen to a one-hour recording
is an authoritative source on mandatory and private (http://www.mercer.com/wef-webcasts) presented by the
benefit practices as well as statutory regulations around World Economic Forum, Mercer and the OECD in which
the world. Recent and pending regulatory changes help we share with you the insights from personal interviews
employers manage changes in benefits across with 200 CEOs, senior executives, government
boundaries. WBEG offers data for 64 countries; the 2009 ministers, academics, and NGO representatives on
edition is available in five regional volumes. healthcare and pensions issues. You are welcome to
download the associated two publications at:
http://www.imercer.com/wbeg
http://www.mercer.com/wef
MercerGOLDTM Going Global Guide

TM
MercerGOLD is Mercer’s Global OnLine Database, Going Global is a guide to Mercer’s latest and best
currently used by more than 150 multinational companies thinking, and offers time-saving steps and contact names
to store, manage, and analyze information on the design for easy access to Mercer’s international resources
and financing of their employee benefits, compensation (global surveys, tools, publications, Mercer global
and HR programs worldwide. services and more), organized by employer challenge.
The guide is updated biannually.
http://www.mercer.com/mercergold
E-mail request for free Going Global guide:
Rivkah.Pontos@mercer.com.

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China Puerto Rico For further information, contact
Colombia Russia your local Mercer office or
the firm’s headquarters:
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New York, NY 10036
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Or visit our website:
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Greece Spain © 2009 Mercer LLC
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Israel United Kingdom
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Compensation Plans Around The World Mercer CPAW - Sept 9 '09

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2. Mercer Human Resource Consulting

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1. Mercer/Marsh Global Presence

Global Report Team

Global Project Manager

About Mercer and Marsh

Copyright 2009 Mercer LLC. All rights reserved. 5

Copyright 2009 Mercer LLC. All rights reserved. 6

Eastern Europe Western Europe

 Annual salary reviews are common in all of the countries.

 A job evaluation approach to pay structures is common in seven of the countries.

Copyright 2009 Mercer LLC. All rights reserved. 7

3.2 Remuneration Mix – Americas

Remuneration Mix – Remuneration Mix –

Copyright 2009 Mercer LLC. All rights reserved. 8

3.3 Remuneration Mix – Asia Pacific

Remuneration Mix – Remuneration Mix –

Hong Kong Hong Kong

New Zealand New Zealand

South Korea South Korea

Copyright 2009 Mercer LLC. All rights reserved. 9

3.4 Remuneration Mix – Western Europe

Remuneration Mix – Remuneration Mix –

Copyright 2009 Mercer LLC. All rights reserved. 10

3.5 Remuneration Mix – Eastern Europe, Middle East & Africa

Remuneration Mix – Remuneration Mix –

Czech Rep. Czech Rep.

South Africa South Africa

Copyright 2009 Mercer LLC. All rights reserved. 11

Copyright 2009 Mercer LLC. All rights reserved. 12

Copyright 2009 Mercer LLC. All rights reserved. 13

Meals Allowance 9 Meals allowances are not commonly provided by employers.

United States of America

Meals Allowance 9 Companies occasionally provide meals allowances.

Observations: The majority of surveyed companies provide performance-based variable bonuses.

Mandatory Minimum Wage No mandatory minimum wage is imposed.

Other Cash Allowances:

Phone Allowance 9 Phone allowance prevalence varies by level.

Position Allowance 9 Position allowance prevalence varies by level.

Mandated Vacation Allowance 9 Vacation allowance is not mandated.

Mandatory Minimum Wage No mandatory minimum wage is imposed.

Mandatory Minimum Wage There is no mandatory minimum wage.

Meals Allowance 9 Meals allowances are occasionally provided by employers.

Transportation Allowance 9 Transportation allowances are not commonly offered by employers.

Mandatory Minimum Wage EUR 1,321 per month.

Transportation Allowance 9 Transportation allowances are not commonly offered by employers.

Mandatory Minimum Wage Mandatory minimum wage is EUR 624.

Mandatory Minimum Wage Regulated by collective agreements.

Car Benefit 9 Company car benefits are prevalent.

Meals Allowance 9 Meals allowances are provided by half of companies.

Meals Allowance 9 A relatively small number of companies provide meals allowances.

Mandatory Minimum Wage Minimum wage is RUB 4,330 per month.

Transportation Allowance 9 Nearly all companies provide a transportation allowance to employees.

MercerGOLDTM Going Global Guide

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Annual salary reviews are common in all of the countries.

A job evaluation approach to pay structures is common in seven of the countries.