1. Case Study – International Compensation
Management
A UNIVERSAL CONSENSUS CASE STUDY OF INTERNATIONAL TALENT RETENTION AT A MULTINATIONAL
ACCOUNTING FIRM IN AUSTRIA
INTRODUCTION
Due to the social democratic nature of Austrian culture, employees are much less motivated by financial
incentives than in more capitalist countries such as the United States. As such, alternative methods need
to be utilized in order to change employee behavior.
Historically, there are two proven ways to motivate employees in such circumstances: non-financial
incentives and leveraging social status. Austrians generally emphasize family life and believe in “working
to live” rather than “living to work.” As such, incentives that allow employees to spend more time with
their families and improve their life/work balance are the most effective way to provide motivation.
In addition to explicit incentive systems, Austrians are frequently intrinsically motivated by social status.
By creating a social hierarchy that can be climbed through accomplishing specified goals and objectives,
cultural change can be adopted over time.
Establishing better external relationships with customers can be accomplished by focusing on leveraging
an understanding of Austrian culture. Traditionally, sellers who engage in hard selling practices are seen
as desperate; as such, it is important to educate potential customer on the client’s services outside of
‘cold call’ sessions in order to drive demand. Moreover, because customer interest is more likely to
generate new business than modified selling practices in this atmosphere, it is imperative that the client
delivers a clear and consistent message about product offerings to consumers.
PROBLEM DESCRIPTION
The client is exploring avenues for generating increased sales revenue. They have identified the social
democratic country culture as an inhibitor to sales both internally and externally. Internally, employees
are not motivated to produce sales because they generally lack the confidence to leave their comfort
zones, model those who are successful, and seek constant and never-ending improvement. Austrians try
to fulfill goals to the best of their ability but never try to exceed them. Externally, employees are not
proactive in building business relationships; the Austrian business culture is transactional. It is
customarily to simply react to current need; indeed, professionals identify themselves as technicians
instead of salespeople.
STRATEGY ONE: NON-FINANCIAL INCENTIVES
Research has shown that non-financial incentives can have equal effect on employee motivation when
compared with standard financial incentive systems. In a society that does not allow for significant
income disparity, non-financial incentives can play a key role in motivating employees to sell.

2. Non-financial incentives for employees include:
Reserved preferred parking spaces
Increasingly flexible work hours (e.g. late start)
Additional vacation hours
Reduced work hours on Fridays
Free meals or gym membership
Access to a company vehicle
Tickets to popular events
The specifics of these incentives can be tailored to fit the available incentive budget. In addition,
management should query the employees to determine other areas of interest for future incentives.
STRATEGY TWO: PUBLIC RECOGNITION
In order to emphasize the desired corporate culture, recognition for high-performing employees should
be public; moreover, attendance for public recognition events should be mandatory for all employees.
By providing such recognition, a social structure can be established that intrinsically motivates
employees to perform and thus gain status.
Public recognition can be combined with non-financial incentives in order to establish a focused strategy
for motivating employees to perform to their utmost.
Since the societal nature of Austrians promotes herding of people, there is a danger of social rejection if
an employee is seen as different from the group. Hence, the employee must be perceived as being
rewarded for contributing to the collective good.
STRATEGY THREE: TEAMBUILDING
When establishing culture change, it is critical that employees be comfortable with management so that
they have confidence in the path forward and are not afraid to raise new ideas and objections, which
can often be incredibly helpful to the process. It also increases the likelihood that employees will “buy
in” to the new culture.
In order to conquer the gap between both multi-national backgrounds and between management and
employees, teambuilding events that mix cultures and job functions should be established. The type of
events can be tailored to the employees’ interests (e.g. lunches, company retreats, sporting events, or
other activities).
Cross-functional collaboration between various service departments is essential for client to implement
core mission value and transition from a service based company to a solutions based company.
Managers and employees must be educated on the various offering in other departments. Cross-
functional team projects and activities will ensure that employees get to know their counterparts in

3. other departments and understand the benefits of solutions based offerings.
STRATEGY FOUR: BUILDING EXTERNAL RELATIONSHIPS
Building external relationships is an extremely difficult endeavor; however, ensuring emphasis on key
areas can increase the likelihood of success. The client should focus on the following areas:
Ensure consistency and clarity in Marketing Communications (answer the “what” and “why” for
consumers)
Participate in nontraditional advertising events (e.g. community events with employee participation)
Emphasize to employees the power of building relationships through networks and connections (much
preferred to ‘cold calling’ in Austrian culture)
Tribalism in Austria has historic roots. Austrians have always had to look after their own. This attitude is
evident in their policies on welfare. If a foreign company does not have an effective conditioning
program for new employees they revert to tribalism to preserve their identity. The employee would take
risks on building an external network if it benefits the entity he associates with his group/tribe. The key
here is identifying the entity be it his department, team or self and reward the entity. There are many
ways to identify the entity.
Leverage existing business partners to establish new relationships
Identify key goals (e.g. arranging meetings with potential new customers) and align non-financial and
public recognition incentives with them in order to increase employee motivation in building new
relationships
Work with employees to identify specific disconnects in external perceptions and internal product
offerings, then utilize this information to focus marketing activities
Further educate consumers through seminars, conferences, and other awareness events
Approach customers on a level playing field and be straight forward and transparent
The Austrians respect transparency, honesty and openness. The customer believes that U.S. companies
tend to push unnecessary services at premium rates. The client has to make sure that the customer has
a clear idea about the services offered, rates charged and benefits gained. Avoid overselling and using
American approaches to pitching to customer. Using references from past successful Austrian clients
may be advantageous.
Finally, the culture drives people to be perfect. The Austrian will give 100% effort to meet the goal but
he will never exceed it. The concept of delivering more than expected is not understood. Hence, the
goals set should reflect this characteristic. Hard to reach goals may impact the morale of the employees
by discouraging them and putting them on the defensive. A mistake is considered as a fault and not an
opportunity to learn. For people who are afraid to make mistakes, their managers need to set their goals
by defining specific actions and desired behavior. The effective way to change culture is not to change
how people think, but instead to start by changing how people behave. If necessary, managers need to
provide training to change their behavior. In Austrian culture, as people try to meet the goals, you can

4. change their behavior by showing what they do and setting achievable goals. The culture will change as
a result.