Designing a Basic Compensation Plan for Wal-Mart in China

Introductory Analysis in which you succinctly address (2 pp.):

A.Wal-Mart's strengths and weaknesses regarding compensation

B.Issues regarding compensation plans for international companies in China

C.Implications of unionization on Wal-Mart's compensation plans in China

2.Outline basic elements of your suggested plan, your rationale for each element, and how each element addresses the challenges that you have identified above (2-4 pp.). Elements of your plan should include (see the compensation link in the background readings for additional details):

A.Objectives that you recommend for the compensation program

B. Who should be involved in overseeing the program's design and implementation?

C. Compensation philosophy:

i.Compensation committee - who should be involved? How should it work?

ii.What, if any, differences should exist in pay structures for executives, professional employees, sales employees, hourly versus salaried employees, incentive-based versus non-contingent pay (i.e. salary), China national vs. expatriate employees.

iii. Should the company should set salaries at, above, or below market, and according to which market(s) standards? China local, China national, international, etc.?

iv.What types of compensation should be included in the plan, and which are most important? To what extent should non-cash incentives and/or benefits replace or supplement cash compensation? Should Wal-Mart use cash incentives in addition to salaries, and if so how?

3.Summation How will your plan help Wal-Mart successfully compete to attract and retain qualified employees in the increasingly tight China labor market? How will it address the issues Wal-Mart is facing in China?