Compensation in Denmark
Research Paper # 2
By David D. Stewart
Compensation & Benefit Systems
Sandra Kruse 29 January 2014
1.0 Executive Summary
I conducted research analysis and a comparison of the cultural characteristics between Denmark and the United States. This research included the analysis of the world view from a Danish point of view and how it would affect compensation packages. To attract and retain quality employees a cultural analysis is paramount in the understanding of what is most important to the Danish and how they differ from the United States workforce.
My research concluded there are few cultural differences which would impact a working relationship between Danish employees and American Business. Potential challenges addressed include cultural attitudes, language, laws, government and how they affect compensation and benefits packages.
2.0 Sociocultural Analysis
2.1 Education – Population – Income -
Results of the Third International Mathematics and Science Study (TIMSS) involving a half-million students in 41 countries.
A comparison of research concludes that education, based on hiring policies, should neither impact on compensation, job performance, nor the work environment as a whole.
Differences in population size; overall percentages in most areas such as industry, urbanization and work force within labor areas are consistent with American norms. Two issues to be aware of is the difference in ethnic groups and their languages, cultures and religions, and the viewpoint of the Danish people of equality of all, to include said ethnic groups, women, which make up fully one half of the Danish workforce, and even those with different sexual orientations, among others.
Income Levels in the average household net financial wealth in United States is estimated at $51,371 USD compared to income Levels in the average household net financial wealth in Denmark which is estimated at $40,516 USD. At first glance the American worker enjoys a higher pay scale. A more in depth analysis takes into account the work/life balance of the Danish and the higher rate of taxation due to welfare programs embraced by the country and its citizens. The basic principle of the Danish welfare system, often referred to as the Scandinavian welfare model, is that all citizens have equal rights to social security. Within the Danish welfare system, a number of services are available to citizens, free of charge. This means the Danish health and educational systems are free. The Danish welfare model is subsidized by the state, and as a result Denmark has one of the highest taxation levels in the world. This again brings me to the point of benefits packages as a way of attracting and retaining talented employees.
2.2 Cultural Comparisons
Work-life balance literally means prioritizing between work (career and ambition) on the one hand and life (health, pleasure, leisure, spirituality and family) on the other.
Danes enjoy a high degree of flexibility at work – often being able to choose when they start their working day and having the flexibility of working from home.
The lunch break is often at a designated time each day, enabling colleagues to interact and eat together, thus getting away from their desks.
There is a minimum 5 weeks’ paid holiday for all wage earners.
The Danish welfare society is characterized by quality of life and a good work-life balance.1
Based on the results of the cultural research, I have found the American Manager must be cognizant of language differences. Although Dane’s understand the concept of authority they view managers as coordinators and directors as Denmark has an egalitarian culture. These things may have a tendency to create misunderstandings and create a hostile work environment.
3.0 Economic and Political (Government) System