Why Global Recognition Needs Its Own Standard-of-Living Index
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4 min read
When The Economist created the Big Mac IndexOpens in a new tab nearly 40 years ago, it was meant as a bit of a joke. It was a light-hearted way to explain the economic theory of Purchasing Power Parity (PPP)Opens in a new tab.
The idea was simple enough to stick: if exchange rates really reflected purchasing power, then an identical basket of goods should cost about the same everywhere. Rather than using a complicated list of groceries, the index used one globally familiar item to make the point.
It worked because it captured something people instinctively understand. Money may be money, but what it can actually buy is not always the same from one place to another.
That same lesson applies to employee recognition.
Imagine a global company recognizing three employees for an exceptional project. One is in Boston, another in Berlin, and the third in Bangalore. Each receives a $100 award.
On paper, the company has equitable recognition and rewards. Three employees. Three awards. Same amount of value. But the experience of receiving those awards is anything but identical.
Here’s a simple illustrative example of how $100 can feel very different across markets:
$100 Purchasing Power Breakdown
| City | What $100 USD Might Buy |
| Boston, MA | A nice meal for one. A main course and a drink at a nice downtown hotel could run roughly $65–$85 for your Boston-based employee. Once you add Boston's 7% tax and a 20% tip, a $100 budget is exhausted on a single person. |
| Berlin, Germany | A dinner date for two. Your Berlin employee can probably bring a date, as a three-course dinner for two at a high-quality hotel bistro often averages around €70–€80 ($75–$85 USD). |
| Bangalore, India | A dinner date for two AND an overnight at the hotel. With $100 USD (₹8,400 INR) this employee might be able to book a nice hotel room for $50–$60 a night, with the remaining $40 paying for a fantastic, upscale dinner for two. |
The exact comparison matters less than the point: the same award can carry very different weight depending on where it is received. And that is where global recognition gets tricky.
Equal is not always equitable
Most multinational organizations have become highly sophisticated about pay equity. Compensation reflects local labor markets, tax structures, and cost of living. No one expects identical salaries across every geography.
Recognition, however, often gets treated differently. Budgets are set globally. Award levels are converted into local currencies. Programs are rolled out consistently around the world. On the surface, that feels fair because everyone receives the same award.
But recognition is not compensation. Recognition is emotional. It is symbolic. Its job is not simply to transfer value, but to communicate appreciation, reinforce behavior, and strengthen culture.
So what matters is not just the number attached to the award. It is what that award feels like when it reaches the employee.
If one employee experiences a reward as generous and thoughtful while another sees it as modest, the organization has unintentionally sent two different messages about the same contribution.
No leader sets out to do that. Yet it happens every day, often without anyone noticing.
Why exchange rates are not enough
One of the biggest misconceptions in global rewards is that currency conversion solves the problem. It does not.
Exchange rates tell us how currencies relate to one another. They do not tell us what people can actually buy. That is why the Big Mac Index caught on in the first place. It gave people a quick way to understand that purchasing power matters.
But even traditional cost-of-living measures have limits when it comes to employee recognition, because they were never built for rewards.
Most standard indices include categories such as housing, transportation, healthcare, education, and utilities. Those expenses are essential when you are relocating an employee or benchmarking salaries.
They are largely irrelevant when someone receives a recognition award – because people do not redeem recognition points to pay a mortgage.
They redeem them for the things that feel like a reward: a family meal, a coffee machine they have wanted for months, new running shoes, a weekend experience, or a gift for someone they love.
Recognition lives in the world of discretionary spending. Which means measuring its value requires a different lens.
Recognition deserves its own basket of goods
That is the question Workhuman asked: what would a purchasing-power index look like if it were built specifically for recognition?
At the time, one did not exist. So we built one.
The result is SOLI, Workhuman’s proprietary Standard of Living Index for employee recognition. It is built with Mercer, and based on their real-world surveys across more than 400 cities in over 200 countries, focused on where local employees actually shop rather than expatriate pricing. Workhuman and Mercer then customized the index specifically for recognition, removing categories such as housing, transportation, and medical costs and centering the goods people actually redeem for: dining, entertainment, home goods, clothing, and other discretionary purchases.
The index is also updated twice a year so it stays current as markets change.
That makes SOLI something more useful than a generic cost-of-living measure. It is a tool that actually helps ensure the gift you give has the value you intended.
Protecting the meaning behind the reward
Recognition programs work because employees believe their contributions are valued. When awards consistently feel meaningful, they reinforce culture, strengthen belonging, and encourage the behaviors organizations want to see repeated.
But if employees begin comparing recognition across borders and discover that the same award stretches dramatically further in one country than another, the perception of fairness can begin to erode.
Global organizations spend enormous effort creating consistent employee experiences. They align leadership expectations, establish shared values, and build common cultures that transcend geography.
Recognition should reflect that same philosophy. Not by making every award identical. But by making sure every employee receives the same intended impact.
One culture deserves one standard of appreciation
If the Big Mac Index taught us that exchange rates do not tell the whole story, global recognition teaches us something similar.
A reward is not defined by the number printed on it. It is defined by what it means to the person receiving it.
For organizations investing in recognition to build culture, strengthen engagement, and reinforce values, that is an important distinction.
Because the ultimate goal is not to give everyone the same reward. It is to make sure everyone feels equally appreciated.
Talk to our team to learn more about SOLI and the other behind-the-scenes features that make Workhuman the most best recognition solution on the market for global teams.
Darcy Jacobsen
Darcy is a passionate storyteller and champion of workforce transformation, human connection, and recognition-driven culture. As an author on the Workhuman Live Blog, she loves to connect deep research insights with modern workplace dynamics to uncover what really drives engagement, belonging, and happiness at work. With a background in communications and a master's in medieval history, she brings a unique perspective to her writing, taking deep dives into all topics around organizational psychology and the science of gratitude.