SOLI Framework For Effective Global Employee Recognition
Global organizations need global solutions. Especially when implementing a company-wide solution, such as an employee rewards and recognition program, global companies might face unprecedented challenges along the way. One such major problem is the conversion of reward points when recognizing employees from different corners of the world.
In this scenario, it's essential that while building your rewards and recognition platform, consider its features, including:
Will this program run on a SOLI framework, allowing me to easily reward my global workforce?
First Of All, What Is SOLI?
SOLI, also known as the Standard Of Living Index, is a measure of the expense of living in a particular place, determined by the prices one has to pay for purchasing goods or services.
As evident, the SOLI differs from place to place, especially from country to country. In a country with a high SOLI, such as the USA, people would have to spend more to afford their necessities.
Subsequently, people of a country with a lower SOLI would have to pay significantly less to purchase the same goods.
To sum it up, the SOLI of a country is a major contributing factor to the employees' pay structure. A high SOLI warrants a higher pay level, while a lower SOLI requires a lower pay range.
How SOLI Affect Your Employee Recognition Initiatives?
As discussed earlier, SOLI affects the pay structure of employees for the same organization but in different countries. Just as it doesn't justify paying the same for two employees working in two different countries, it doesn't make sense why your rewarding initiative should be any different.
Here's an example. Say you have two employees, M living in the USA and N residing in India, whose stellar work you wish to show the right amount of appreciation.
The reward amount for the American employee in 10 dollars. Similarly, the employee in India gets 10 dollars worth of reward, which is approximately 700 INR. Consequently, the Indian employee will benefit more (since the SOLI is low) by allowing him/her to purchase a quantitatively more significant amount of goods and services.
This example is further illustrated by the Big Mac Index, which is used to exhibit the difference of power parity by comparing the price of a Big Mac in different countries.
It showcases why global organizations need to establish a rewards and recognition platform that bypasses the above problem.
Benefits of A Recognition Platform That Runs On A SOLI Framework
Benefit 1: Fairness
An employee reward system based on the foundation of SOLI provides the fairness aspect when dealing with recognition practices in different branches worldwide.
Benefit 2: Equitable Rewards ≠ Reward Points Conversion
Many companies make the mistake of applying a simple currency conversion to rewards when globally expanding a recognition and rewards program. It, however, gives a very inequitable rewards experience.
A SOLI-based reward system provides organizations with the means to reward employees justly.
Benefit 3: Ease of Use
SOLI-based rewards program removes the obstacles that organizations have to face when practicing equitable rewarding.
A reward system, like Vantage Rewards, eliminates the complexity of the conversion of rewards by automating the whole process and recognizing your workforce with as much ease as possible.
Vantage Circle and The SOLI Framework
Take, for instance, our rewards and recognition platform, Vantage Rewards.
Through our SOLI (Standard of Living Index) framework, we ensure equal and fair regulation of rewards points against currency for all employees across the globe.
The SOLI framework goes beyond the currency conversion rates (which change frequently) and measures against the standard of living in that country.
As per the SOLI matrix, the conversion of currencies will be decided by the organization as per the standard of living in the particular countries.
Finally: Your Thoughts?
Do you believe the SOLI-supported rewards and recognition program is as beneficial as it appears? Or has it failed to address some of the significant issues? Please send us an email and let us know what you think!