• Introduction to international compensation
• Meaning and Definition of international
• Objectives of international compensation
• Forms of international compensation
• Compensation is an integral part of human resource management
which helps in motivating the employees and improving organizational
• Compensation provided to employees can direct in the form of
monetary benefits and/or indirect in the form of non-monetary benefits
known as perks, time off, etc.
• Compensation does not include only salary but it is the sum of all
rewards and allowances provided to the employees in return for their
• Compensation is extrinsic reward for an employee. Extrinsic rewards
include praise from a superior, salary, employee benefits, career
• Almost all the employees accept jobs in MNC’s take-up assignments in
various countries, & take-up the risk, bear inconveniences & discomforts
in foreign assignments mostly based on the compensation package.
Meaning and Definition of International Compensation
• According to R. Wayne Mondy “ compensation Is the
total of all rewards provided to employees in return to
their services. The overall purposes of providing
compensation are to attract, retain, and motivate
Objectives of International Compensation:
The most important objective of any pay system is fairness or
equity, generally expressed in three forms:
• Internal equity:
This ensure that more difficult jobs are paid more.
• External equity:
Where jobs are fairly compensated in comparison to similar jobs
in labour market.
• Individual equity:
It ensures equal pay is ensured for equal work
Other objectives of compensation are:
Attract talent and Retain talent
New and desired behavior
Comply with legal rules
Ease of operation
Forms of compensation:
Direct compensation refers to monetary benefits offered and
provided to employees in return of the services they provide to
The monetary benefits include basic salary, allowances, bonus,
incentives. They are given at a regular interval at a definite
Indirect compensation refers to non-monetary benefits
offered and provided to employees in lieu of the services
provided by them to the organization.
They include Leave Policy, Overtime Policy, allowances,
Hospitalization, Insurance, Leave travel Assistance
Limits, retirement benefits ,Holiday Homes etc..