Pergah Transport Limited: Compensation Fairness in a Multinational Context

Description

A female entrepreneur in Ghana developed a transportation company that provided services for national and large multinational organizations in the country. A key service that Pergah Transport Limited (Pergah) offered was vehicles and drivers for the executive expatriates of multinationals. The drivers for that service were employed by Pergah but embedded with the contracting companies. Pergah’s remaining employees—mechanics, other drivers, and support staff—were based out of the company’s premises in Accra.

The employees at Pergah’s premises were paid above the employment standards for Ghanaians; however, the drivers who were embedded with the multinational companies were compensated according to the standards established by those companies. The variance between local and multinational standards for employees of the same company led to differences in job satisfaction, motivation, and compensation. The Pergah-based employees were paid fairly, and increasing their rate to the multinational level would have posed financial challenges to the company. How, then, could Pergah address the discrepancy and resolve these issues?

Learning Objective

This case can be used in organizational behaviour and human resources courses or modules at the postgraduate level. It could also be used in an upper-level course at the undergraduate level. While the case is largely about compensation equity, motivation, and job satisfaction, the information is also sufficient to support discussion about employment in developing African countries. After working through the case and assignment questions, students will be able to identify the internal and external factors that influence the design of compensation programs;evaluate a compensation management program and determine its fairness;analyze the interrelationship between compensation, employee attitudes, and motivation; andconsider the challenges local and multinational companies face when the latter expand to developing (or emerging) countries and hire local talent.