Beauty is in the Eye of the Beholder: Toward a Contextual Understanding of Compensation of IT Professionals Within and Across Geographies

How do multinational corporations (MNCs) and domestic firms compensate technical and managerial skills of knowledge workers within and across geographies? This paper answers this question by examining how developed economy MNCs and emerging economy firms value MBA education and firm-specific IT experience of IT professionals in India; and how developed economy MNCs value MBA education and firm-specific IT experience differently across India and the U.S. Our analyses of archival data on more than 20,000 IT professionals reveal two important findings. First, for IT professionals in India, the marginal effect of firm-specific IT experience on compensation is greater for developed economy MNCs than for emerging economy firms, and the marginal effect of MBA education is greater for emerging economy firms than for developed economy MNCs. Second, when we compare compensation of IT professionals employed by MNCs across India and the U.S., we find a greater marginal effect of firm-specific IT experience in India but a greater marginal effect of MBA education in the U.S. These findings suggest that the manner in which MNCs and emerging economy firms value and compensate IT professionals across geographies is consistent with their firm-level strategies and capabilities. The findings provide important insights on compensation of IT professionals within and across geographies based on firm national origin. These contributions are important to understand the broader context of compensation of IT professionals across firm national origin and geographies