The Underlying Issue Behind Russia’s Prevailing Compensation System: an Analysis of the Current Russian Compensation System

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THE UNDERLYING ISSUE BEHIND RUSSIA’S PREVAILING COMPENSATION SYSTEM: AN ANALYSIS OF THE CURRENT RUSSIAN COMPENSATION SYSTEM
A Term Paper Presented to the Faculty of European University In Partial Fulfillment of The Requirements for Human Resource Management

By: Osanna Nazaretyan 14 March 2011

Promoter: Prof. Tina Huesing

THE UNDERLYING ISSUE BEHIND RUSSIA’S PREVAILING COMPENSATION SYSTEM

Table of contents
Abstract Introduction Which are the major challenges in the prevailing compensation system in the Russian Tourism industry? The Theories of Motivation Herzberg’s Two Factor Theory Expectancy Theory by Victor Vroom Conclusions – Recommendations References 5 6 6 8 11 13 3 4

Table of
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(This is coming as a bi-product of long communist political setup in the country) (Berger O. Nancy, 2000).

Nazaretyan Osanna, EU Munich, HRM

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THE UNDERLYING ISSUE BEHIND RUSSIA’S PREVAILING COMPENSATION SYSTEM

2)

Performance and Membership Pay: Will the compensation

emphasize in the performance or in the membership one has with the company? Unfortunately, in the Russian Tourism industry it is more dependent on the membership with the company than the actual performance of individuals (Puffer and Shekshnia, 1997). 3) Job and Individual Pay: Is the pay dependent on the quality and quantity of job an employee is doing, or on the skill set the employee has, that he brings along with him to the company? According to my experience, in Tourism industry the pay is based on the performance of an employee, not on the skills. 4) Open and Secret Pay: Will the employees have access to information about other workers compensation levels and how are compensation decisions been made (open), or will this stay hidden from the employees (secret). As being confirmed from my colleagues - in the Russian Tourism industry a mix of both, open as well as secret pay system, is practiced.

Which are the major challenges in the prevailing compensation system in the Russian

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