Where does promotion pay?

Salaries and promotion pay increases depend upon location, culture and market condition, says a Hay Group study. Highlighting divergent pay levels, the study finds that mature economies tend to pay clerical/technical positions better while an equivalent role in a fast-growing market is paid considerably lower.

However, pay gaps between mature and fast moving markets close at senior levels across the globe, reflecting increasingly globalised market for senior positions. But the pay of entry-level positions is still largely controlled by local market conditions, which explains the big differences. The phenomenon of big leaps in pay - stories of employees leaving a company for double the pay are common in China and other fast-growing markets.

For a country like China, a big promotion means 80 per cent hike but only 22 per cent in a developed market like Sweden. The study finds that cultural factors also play a major role in pay differences. For example, in Scandinavia there's a high acceptance of lower differential between the lowest and highest paid.

The study says managers must review the reward strategy regularly and should keep up with the pace of change.