StudsPlanet is an education consulting firm based in India. The document discusses compensation issues for international human resource managers. It covers key components of international compensation packages such as base salary, foreign service premiums, allowances for housing and education, and benefits. The two main approaches to international compensation - the going rate approach and balance sheet approach - are also outlined, along with their advantages and disadvantages. Special issues around taxation and cost of living adjustments are examined.
This document discusses global talent management and the evolving role of human resource management (HRM). It notes that globalization has led companies to search worldwide for top talent. The roles of HRM include developing and retaining talented employees, anticipating change, and enabling the organization. It also discusses how talent management is evolving from an HR function into a business in itself, with talent segmentation and sustainability becoming important new areas. Finally, it examines some of the thought leaders who have helped establish talent management and HRM as strategic functions.
Chapter 15 MANAGING HUMAN RESOURCES GLOBALLYFeliciaaaaa18
The document discusses managing human resources globally. It identifies recent changes as companies expand internationally and factors that influence human resource management in international markets. It describes different categories of international employees and levels of global participation that companies engage in. It also discusses how companies select, train, and reintegrate expatriate managers for foreign assignments.
Culture can be defined as the set of understandings shared by a community, including values, ideas, perceptions, and codes of conduct. This document discusses several aspects of culture, including value systems, norms, aesthetics, customs, and language. It provides examples of how different cultures approach concepts like eye contact, colors, and hygiene. The document also summarizes several models for understanding cultural dimensions, such as Hofstede's model of power distance, uncertainty avoidance, individualism vs collectivism, and masculinity. Trompenaar's 7 dimensions model is also briefly outlined.
Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in an organization. It involves recruitment planning, strategic development, searching, screening, and evaluation and control. Selection ensures an organization has the right number and kind of people in the right place at the right time. The selection process includes preliminary interviews, selection tests, employment interviews, background investigations, selection decisions, physical examinations, job offers, contracts of employment, and evaluating the selection program. Together, recruitment and selection are fundamental HR processes for building an organization's human resource capacity and delivering quality service.
This document summarizes key concepts in industrial relations, including:
1) The changing nature of employment relationships from centralized regulation to decentralized agreements and contingent work.
2) The roles of trade unions and employer associations in collectively bargaining for workers and businesses.
3) Important industrial relations concepts like collective bargaining, grievance handling, and conflict management approaches.
The document discusses performance appraisal of expatriates. It defines performance appraisal and outlines its objectives for both employees and organizations. It identifies factors that influence expatriate performance like compensation, task, cultural adjustment, and support from headquarters. It also discusses challenges of international performance management like cultural differences, unreliable data, and complex environments. Finally, it provides examples of performance appraisal systems used by companies like Pepsi and guidelines for effective expatriate performance evaluation.
The document discusses various components of international compensation packages. It begins by defining compensation and its objectives. It then covers principles of compensation, approaches in different countries, factors influencing compensation amounts, and theories of compensation. The document also discusses base salary, incentives, allowances, taxes, retirement benefits, and other typical components of an international compensation package. It notes challenges around managing compensation globally due to exchange rates, cost of living differences, and other complexities.
This document discusses job analysis and design. It defines job analysis as determining all pertinent information about a specific job. The main methods of job analysis are observation, interviews, questionnaires, and diaries. Job analysis is used to create job descriptions and specifications, and inform selection, training, performance reviews, and design. Job design structuring work activities and responsibilities. Approaches to design include engineering, human relations, and job characteristics models. Modern techniques incorporate flexibility like job rotation, enlargement, enrichment, and telecommuting.
This document discusses global talent management and the evolving role of human resource management (HRM). It notes that globalization has led companies to search worldwide for top talent. The roles of HRM include developing and retaining talented employees, anticipating change, and enabling the organization. It also discusses how talent management is evolving from an HR function into a business in itself, with talent segmentation and sustainability becoming important new areas. Finally, it examines some of the thought leaders who have helped establish talent management and HRM as strategic functions.
Chapter 15 MANAGING HUMAN RESOURCES GLOBALLYFeliciaaaaa18
The document discusses managing human resources globally. It identifies recent changes as companies expand internationally and factors that influence human resource management in international markets. It describes different categories of international employees and levels of global participation that companies engage in. It also discusses how companies select, train, and reintegrate expatriate managers for foreign assignments.
Culture can be defined as the set of understandings shared by a community, including values, ideas, perceptions, and codes of conduct. This document discusses several aspects of culture, including value systems, norms, aesthetics, customs, and language. It provides examples of how different cultures approach concepts like eye contact, colors, and hygiene. The document also summarizes several models for understanding cultural dimensions, such as Hofstede's model of power distance, uncertainty avoidance, individualism vs collectivism, and masculinity. Trompenaar's 7 dimensions model is also briefly outlined.
Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in an organization. It involves recruitment planning, strategic development, searching, screening, and evaluation and control. Selection ensures an organization has the right number and kind of people in the right place at the right time. The selection process includes preliminary interviews, selection tests, employment interviews, background investigations, selection decisions, physical examinations, job offers, contracts of employment, and evaluating the selection program. Together, recruitment and selection are fundamental HR processes for building an organization's human resource capacity and delivering quality service.
This document summarizes key concepts in industrial relations, including:
1) The changing nature of employment relationships from centralized regulation to decentralized agreements and contingent work.
2) The roles of trade unions and employer associations in collectively bargaining for workers and businesses.
3) Important industrial relations concepts like collective bargaining, grievance handling, and conflict management approaches.
The document discusses performance appraisal of expatriates. It defines performance appraisal and outlines its objectives for both employees and organizations. It identifies factors that influence expatriate performance like compensation, task, cultural adjustment, and support from headquarters. It also discusses challenges of international performance management like cultural differences, unreliable data, and complex environments. Finally, it provides examples of performance appraisal systems used by companies like Pepsi and guidelines for effective expatriate performance evaluation.
The document discusses various components of international compensation packages. It begins by defining compensation and its objectives. It then covers principles of compensation, approaches in different countries, factors influencing compensation amounts, and theories of compensation. The document also discusses base salary, incentives, allowances, taxes, retirement benefits, and other typical components of an international compensation package. It notes challenges around managing compensation globally due to exchange rates, cost of living differences, and other complexities.
This document discusses job analysis and design. It defines job analysis as determining all pertinent information about a specific job. The main methods of job analysis are observation, interviews, questionnaires, and diaries. Job analysis is used to create job descriptions and specifications, and inform selection, training, performance reviews, and design. Job design structuring work activities and responsibilities. Approaches to design include engineering, human relations, and job characteristics models. Modern techniques incorporate flexibility like job rotation, enlargement, enrichment, and telecommuting.
The document discusses four approaches to international compensation:
1. The going rate approach links expatriate pay to local market salaries in the host country. It aims to treat expatriates as local citizens. Advantages include equality with locals, simplicity, and host country identification, while disadvantages include pay variations and potential re-entry problems.
2. The balance sheet approach equalizes costs between international assignments and home country roles. It protects expatriates from financial impacts of living abroad. Advantages include equity and facilitating re-entry, while disadvantages include potential pay disparities versus locals.
3. The international citizen's approach uses a standard basket of goods to determine pay worldwide, rather than adjusting pay to perfectly match local costs.
This document discusses international human resource management and recruitment. It begins by outlining core functions of IHRM including recruitment, selection, expatriates, performance appraisal, training, compensation, women in business, dual career groups, industrial relations, trade unions, and participative management.
It then discusses recruitment in more detail, explaining sources at the macro level (country) and micro level (institutional). The main approaches to recruitment that multinational companies use are also summarized: ethnocentric (parent country nationals), polycentric (host country nationals), regiocentric (regionals), and geocentric (global/any nationality). Advantages and disadvantages of each approach are provided.
Specific recruitment
The Factor Comparison Method is a systematic job evaluation method that ranks jobs based on key factors rather than overall ranking. It involves selecting key jobs representing different salary levels, identifying factors to evaluate all jobs, independently ranking each job under each factor, and assigning monetary values to factors. The wage rate for other jobs is determined by comparing them to key jobs based on their factor rankings. While more analytical, it can be difficult to implement and questionably uses uniform criteria across diverse jobs.
This document provides an overview of international human resource management (IHRM). It defines IHRM as the process of procuring, allocating and effectively utilizing human resources in a multinational organization. IHRM involves managing employees from different cultural and political backgrounds across various countries and managing the greater complexity involved with international assignments. The document outlines some of the key differences between domestic HRM and IHRM, including dealing with expanded mixes of employees from multiple countries and greater external influences. It also discusses some of the common challenges in IHRM, such as culture and language differences, and managing the costs and risks associated with international assignments.
The document discusses employee orientation, including:
1) Defining orientation as introducing new employees to their jobs, coworkers, and organization.
2) The purposes of orientation which are to remove fears, provide valuable information, create a good impression, and encourage positive attitudes.
3) Typical elements of an orientation program including company history, structure, policies, and employee benefits.
4) Factors that contribute to effective versus ineffective orientation, such as proper planning, avoiding information overload, and follow up activities.
Challenges of hrm with modern and future referencesVindhya Theneri
The document outlines current and future challenges for human resource management. Current challenges include the rise of independent contractors, balancing work-life demands, changing employee expectations, globalization, and managing diversity. Future challenges will involve increased workplace flexibility due to virtual offices, rapid technological changes, socio-cultural shifts in the workforce, developing human capital, and potential labor shortages as growth rates decline. HRM must adapt strategies to address these ongoing trends affecting the workforce.
This document discusses international staffing strategies used by multinational corporations. It describes the types of international managers as parent country nationals (PCNs), third country nationals (TCNs), and host country nationals (HCNs). The advantages and disadvantages of using each type are provided. The document also examines the ethnocentric, polycentric, geocentric, and regiocentric approaches to international staffing and the factors that influence staffing decisions. Finally, it discusses the different types of international assignments and roles of expatriates.
This document discusses factors to consider when negotiating an expatriate compensation package. It defines an expatriate as an individual living and working in a country other than their home country, often temporarily. Expatriate compensation packages typically include a base salary, cost-of-living allowance, housing allowance, education allowances for children, relocation assistance, tax equalization payments, and sometimes spouse assistance. When negotiating a package, important factors to consider include the nature of employment (e.g. local contract vs long-term expat package), contract duration and termination notice terms, and what country's laws will govern the contract.
This document discusses international human resource management (IHRM). IHRM involves managing human resources across national borders and includes typical HR functions like recruitment, selection, and training, as well as expatriate management. The objectives of IHRM are to create a local appeal while maintaining a global identity, increase cultural awareness among global managers, and provide country-specific training. IHRM is needed to manage expatriates, address globalization, and effectively utilize talent across offices. Common IHRM strategies include ethnocentric, polycentric, and geocentric staffing policies. IHRM differs from domestic HR in its international scope and additional complexities from external cultural and institutional factors.
When undertaking recruitment exercises, it is essential potential new employers are aware of the legal duties incumbent upon them. Whether it is ensuring decisions are not discriminatory, or undertaking sufficient measures to check an applicant’s eligibility to work in the UK or work with children, recruitment officers must have a thorough grounding in the legal implications of the decisions they make and the selection processes they employ.
In this recorded webinar, Adam Willoughby, a specialist employment law barrister at Broadway House Chambers, will:
‘Roadmap’ the key legal obligations recruiters are under and should be aware of when undertaking the recruitment process;
Look specifically at the duties contained in Equality Act 2010 in the context of recruitment;
Consider factors new employers should and should not be taking into account when assessing candidates
Explore practical steps recruiters can take at an early stage to help ensure compliance with legal obligations throughout the employment relationship.
This webinar will appear to Recruitment Officers, HR personnel, Managers, and Business Owners.
You can view the some of the webinar at the end of the slide deck. If you would like to view more on demand webinars or attend the live Shorebird RPO events, please visit http://www.shorebird-rpo.com/free-webinars
The document discusses several key topics regarding international staffing and recruitment:
1. It outlines different staffing orientations (ethnocentric, polycentric, regiocentric, geocentric) and their characteristics.
2. Key issues in international human resource planning and managing expatriates are identified, including identifying top talent, providing development opportunities, and dual career challenges.
3. Recent trends in international recruitment like increasing diversity, outsourcing, and background checks are examined.
International human resource managementrhimycrajan
This document discusses international human resource management. It begins by defining IHRM and explaining why global organizations develop international HR strategies due to factors like global competition and differences in business environments across countries. It then describes four types of international organizations and discusses some key aspects of IHRM like differences between domestic and international HRM, external factors that influence IHRM, and common IHRM practices such as international staffing, training for international assignments, repatriation, and compensation considerations. The document concludes that understanding cultural differences and workforce issues is important for HR managers and success in global business situations.
Chapter 5 International Compensation Management.pptxShwethaGy2
This chapter discusses managing international compensation and the challenges involved. It covers managing compensation packages for expatriates, including base salary, benefits, allowances, incentives, and taxes. Different compensation strategies are explored, such as taking a contingency theory approach and aligning compensation with organizational or national culture. The chapter also compares the balance sheet approach and going rate approach to setting expatriate compensation.
This document discusses repatriation and career issues faced by expatriates returning to their home country or headquarters. It identifies challenges with effective repatriation including organizational factors like lack of formal repatriation programs, individual factors like career anxiety and work adjustment, and social-cultural factors like difficulty reestablishing social networks. Successful repatriation requires managing the repatriation process, having a repatriation program, and employing repatriation strategies.
Ihrm cross cultural theories and Recruitment part 2Srilakshmi Angara
This document provides an overview of international human resource management. It discusses several cross-cultural theories including Globe Theory, Hofstede's Cultural Dimensions, and Trompenaars' Framework. Globe Theory identified nine cultural dimensions based on a large global study. Hofstede's model describes the effects of culture on values using six dimensions. Trompenaars' Framework identified seven dimensions of national culture differences. The document also covers international recruitment and selection processes, including sources of recruitment by country and selection criteria and approaches for international assignments. Culture and values are defined as guiding business practices and what is important within a society.
This document outlines objectives and concepts related to global human resource management. It discusses the evolution of global business and global HR, including the development of international corporations, multinational corporations, and global corporations. It describes the global HR functions of staffing, development, compensation, safety and health, and employee relations. It also addresses national cultural differences, global staffing approaches, managing expatriates, and maintaining a consistent corporate culture across borders. The document provides frameworks for understanding national culture differences and keys to effective global HR management.
This document discusses international human resource management and compares work cultures in India, China, and America. It describes the three types of employees that multinational companies have: parent country nationals, host country nationals, and third country nationals. For each type it provides advantages and disadvantages. It also discusses culture shock and outlines the stages employees may experience when adapting to a new culture. Finally, it highlights some key differences in work culture between India, China, and America, such as differences in work hours, punctuality, and the role of work-life balance.
Reward is an incentive plan to reinforce the desirable behavior of workers or employers and in return for their service to the organization.
Compensation and Reward system plays vital role in a business organization.
Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.
Expatriate training and development is becoming a critical part of human resources for firms competing globally. Many multinational companies have established their own training centers and universities to develop employees' skills and provide cultural awareness programs before international assignments to better assist with adjusting to new cultures abroad. The training focuses on creating cultural awareness, learning the host country's language, and practical assistance to help expatriates and their families rapidly adapt to unexpected events when taking up roles in other countries.
This document discusses compensation issues for international human resource managers. It covers several topics:
- The complex issues facing IHR managers related to compensation in different country contexts
- The objectives of the chapter, which are to examine compensation complexities when moving from domestic to international contexts, key compensation components, approaches, and special problem areas
- An introduction noting the dual focus of managing local compensation details while maintaining unified strategic policies
- Requirements for successful compensation including knowledge of different country laws, customs, and employment practices
- Objectives of international compensation programs that should attract and retain employees where needed
- Key components of international compensation including base salary, allowances, benefits, and considerations for different employee categories
The document discusses four approaches to international compensation:
1. The going rate approach links expatriate pay to local market salaries in the host country. It aims to treat expatriates as local citizens. Advantages include equality with locals, simplicity, and host country identification, while disadvantages include pay variations and potential re-entry problems.
2. The balance sheet approach equalizes costs between international assignments and home country roles. It protects expatriates from financial impacts of living abroad. Advantages include equity and facilitating re-entry, while disadvantages include potential pay disparities versus locals.
3. The international citizen's approach uses a standard basket of goods to determine pay worldwide, rather than adjusting pay to perfectly match local costs.
This document discusses international human resource management and recruitment. It begins by outlining core functions of IHRM including recruitment, selection, expatriates, performance appraisal, training, compensation, women in business, dual career groups, industrial relations, trade unions, and participative management.
It then discusses recruitment in more detail, explaining sources at the macro level (country) and micro level (institutional). The main approaches to recruitment that multinational companies use are also summarized: ethnocentric (parent country nationals), polycentric (host country nationals), regiocentric (regionals), and geocentric (global/any nationality). Advantages and disadvantages of each approach are provided.
Specific recruitment
The Factor Comparison Method is a systematic job evaluation method that ranks jobs based on key factors rather than overall ranking. It involves selecting key jobs representing different salary levels, identifying factors to evaluate all jobs, independently ranking each job under each factor, and assigning monetary values to factors. The wage rate for other jobs is determined by comparing them to key jobs based on their factor rankings. While more analytical, it can be difficult to implement and questionably uses uniform criteria across diverse jobs.
This document provides an overview of international human resource management (IHRM). It defines IHRM as the process of procuring, allocating and effectively utilizing human resources in a multinational organization. IHRM involves managing employees from different cultural and political backgrounds across various countries and managing the greater complexity involved with international assignments. The document outlines some of the key differences between domestic HRM and IHRM, including dealing with expanded mixes of employees from multiple countries and greater external influences. It also discusses some of the common challenges in IHRM, such as culture and language differences, and managing the costs and risks associated with international assignments.
The document discusses employee orientation, including:
1) Defining orientation as introducing new employees to their jobs, coworkers, and organization.
2) The purposes of orientation which are to remove fears, provide valuable information, create a good impression, and encourage positive attitudes.
3) Typical elements of an orientation program including company history, structure, policies, and employee benefits.
4) Factors that contribute to effective versus ineffective orientation, such as proper planning, avoiding information overload, and follow up activities.
Challenges of hrm with modern and future referencesVindhya Theneri
The document outlines current and future challenges for human resource management. Current challenges include the rise of independent contractors, balancing work-life demands, changing employee expectations, globalization, and managing diversity. Future challenges will involve increased workplace flexibility due to virtual offices, rapid technological changes, socio-cultural shifts in the workforce, developing human capital, and potential labor shortages as growth rates decline. HRM must adapt strategies to address these ongoing trends affecting the workforce.
This document discusses international staffing strategies used by multinational corporations. It describes the types of international managers as parent country nationals (PCNs), third country nationals (TCNs), and host country nationals (HCNs). The advantages and disadvantages of using each type are provided. The document also examines the ethnocentric, polycentric, geocentric, and regiocentric approaches to international staffing and the factors that influence staffing decisions. Finally, it discusses the different types of international assignments and roles of expatriates.
This document discusses factors to consider when negotiating an expatriate compensation package. It defines an expatriate as an individual living and working in a country other than their home country, often temporarily. Expatriate compensation packages typically include a base salary, cost-of-living allowance, housing allowance, education allowances for children, relocation assistance, tax equalization payments, and sometimes spouse assistance. When negotiating a package, important factors to consider include the nature of employment (e.g. local contract vs long-term expat package), contract duration and termination notice terms, and what country's laws will govern the contract.
This document discusses international human resource management (IHRM). IHRM involves managing human resources across national borders and includes typical HR functions like recruitment, selection, and training, as well as expatriate management. The objectives of IHRM are to create a local appeal while maintaining a global identity, increase cultural awareness among global managers, and provide country-specific training. IHRM is needed to manage expatriates, address globalization, and effectively utilize talent across offices. Common IHRM strategies include ethnocentric, polycentric, and geocentric staffing policies. IHRM differs from domestic HR in its international scope and additional complexities from external cultural and institutional factors.
When undertaking recruitment exercises, it is essential potential new employers are aware of the legal duties incumbent upon them. Whether it is ensuring decisions are not discriminatory, or undertaking sufficient measures to check an applicant’s eligibility to work in the UK or work with children, recruitment officers must have a thorough grounding in the legal implications of the decisions they make and the selection processes they employ.
In this recorded webinar, Adam Willoughby, a specialist employment law barrister at Broadway House Chambers, will:
‘Roadmap’ the key legal obligations recruiters are under and should be aware of when undertaking the recruitment process;
Look specifically at the duties contained in Equality Act 2010 in the context of recruitment;
Consider factors new employers should and should not be taking into account when assessing candidates
Explore practical steps recruiters can take at an early stage to help ensure compliance with legal obligations throughout the employment relationship.
This webinar will appear to Recruitment Officers, HR personnel, Managers, and Business Owners.
You can view the some of the webinar at the end of the slide deck. If you would like to view more on demand webinars or attend the live Shorebird RPO events, please visit http://www.shorebird-rpo.com/free-webinars
The document discusses several key topics regarding international staffing and recruitment:
1. It outlines different staffing orientations (ethnocentric, polycentric, regiocentric, geocentric) and their characteristics.
2. Key issues in international human resource planning and managing expatriates are identified, including identifying top talent, providing development opportunities, and dual career challenges.
3. Recent trends in international recruitment like increasing diversity, outsourcing, and background checks are examined.
International human resource managementrhimycrajan
This document discusses international human resource management. It begins by defining IHRM and explaining why global organizations develop international HR strategies due to factors like global competition and differences in business environments across countries. It then describes four types of international organizations and discusses some key aspects of IHRM like differences between domestic and international HRM, external factors that influence IHRM, and common IHRM practices such as international staffing, training for international assignments, repatriation, and compensation considerations. The document concludes that understanding cultural differences and workforce issues is important for HR managers and success in global business situations.
Chapter 5 International Compensation Management.pptxShwethaGy2
This chapter discusses managing international compensation and the challenges involved. It covers managing compensation packages for expatriates, including base salary, benefits, allowances, incentives, and taxes. Different compensation strategies are explored, such as taking a contingency theory approach and aligning compensation with organizational or national culture. The chapter also compares the balance sheet approach and going rate approach to setting expatriate compensation.
This document discusses repatriation and career issues faced by expatriates returning to their home country or headquarters. It identifies challenges with effective repatriation including organizational factors like lack of formal repatriation programs, individual factors like career anxiety and work adjustment, and social-cultural factors like difficulty reestablishing social networks. Successful repatriation requires managing the repatriation process, having a repatriation program, and employing repatriation strategies.
Ihrm cross cultural theories and Recruitment part 2Srilakshmi Angara
This document provides an overview of international human resource management. It discusses several cross-cultural theories including Globe Theory, Hofstede's Cultural Dimensions, and Trompenaars' Framework. Globe Theory identified nine cultural dimensions based on a large global study. Hofstede's model describes the effects of culture on values using six dimensions. Trompenaars' Framework identified seven dimensions of national culture differences. The document also covers international recruitment and selection processes, including sources of recruitment by country and selection criteria and approaches for international assignments. Culture and values are defined as guiding business practices and what is important within a society.
This document outlines objectives and concepts related to global human resource management. It discusses the evolution of global business and global HR, including the development of international corporations, multinational corporations, and global corporations. It describes the global HR functions of staffing, development, compensation, safety and health, and employee relations. It also addresses national cultural differences, global staffing approaches, managing expatriates, and maintaining a consistent corporate culture across borders. The document provides frameworks for understanding national culture differences and keys to effective global HR management.
This document discusses international human resource management and compares work cultures in India, China, and America. It describes the three types of employees that multinational companies have: parent country nationals, host country nationals, and third country nationals. For each type it provides advantages and disadvantages. It also discusses culture shock and outlines the stages employees may experience when adapting to a new culture. Finally, it highlights some key differences in work culture between India, China, and America, such as differences in work hours, punctuality, and the role of work-life balance.
Reward is an incentive plan to reinforce the desirable behavior of workers or employers and in return for their service to the organization.
Compensation and Reward system plays vital role in a business organization.
Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.
Expatriate training and development is becoming a critical part of human resources for firms competing globally. Many multinational companies have established their own training centers and universities to develop employees' skills and provide cultural awareness programs before international assignments to better assist with adjusting to new cultures abroad. The training focuses on creating cultural awareness, learning the host country's language, and practical assistance to help expatriates and their families rapidly adapt to unexpected events when taking up roles in other countries.
This document discusses compensation issues for international human resource managers. It covers several topics:
- The complex issues facing IHR managers related to compensation in different country contexts
- The objectives of the chapter, which are to examine compensation complexities when moving from domestic to international contexts, key compensation components, approaches, and special problem areas
- An introduction noting the dual focus of managing local compensation details while maintaining unified strategic policies
- Requirements for successful compensation including knowledge of different country laws, customs, and employment practices
- Objectives of international compensation programs that should attract and retain employees where needed
- Key components of international compensation including base salary, allowances, benefits, and considerations for different employee categories
Meaning of Training and Induction, objective and purpose of induction, need for training, benefits of training, identification of training needs, methods of training.
White Paper: Better Employee Onboarding with Video - Make Every First Day A G...Panopto
This document discusses how video can enhance employee onboarding programs. It begins by noting the challenges of onboarding new employees, including the costs of turnover if onboarding is not effective. It then discusses how traditional onboarding methods are often overwhelming and don't support long-term learning. The document advocates for using video as part of onboarding, noting that video can help employees better retain information, provide a more personalized experience, ensure consistent training across locations, and reduce costs compared to in-person training. It then provides examples of different types of onboarding videos that can be created and considerations for selecting a video platform to support an onboarding program.
The document discusses strategic human resource management (SHRM). It presents models of SHRM including the matching model, control based model, resource based model, and Barney's model. It also discusses the SHRM model of Bamberger and Fombrun's model which links corporate strategy, HRM strategy, and competitive advantage. The document further discusses various HR practices, metrics, and the role of HR in achieving organizational goals.
The document discusses expatriates and multinational corporations. It notes that in 1997, American MNCs had 150,000 expatriates abroad and 83,000 foreign employees in the US, with over 31 million international workers globally and $11 trillion in worldwide MNC sales. Success of international business depends on expatriates, but expatriate failure rates range from 10-50% depending on country, with the US at 30-40% typically due to cultural adjustments, language barriers, and living difficulties. Proper selection, training, support and repatriation are keys to expatriate success.
Objectives of international compensationWhen developing internat.docxhopeaustin33688
Objectives of international compensation
When developing international compensation policies, an MNE seeks to satisfy several objectives. First, the policy should be consistent with the overall strategy, structure and business needs of the multinational. Second, the policy must work to attract and retain staff in the areas where the MNE has the greatest needs and opportunities. Thus, the policy must be competitive and recognize factors such as incentive for foreign service, tax equalization and reimbursement for reasonable costs. Third, the policy should facilitate the transfer of international employees in the most cost-effective manner for the firm. Fourth, the policy must give due consideration to equity and ease of administration.
The international employee will also have a number of objectives that need to be achieved from the firm's compensation policy. First, the employee will expect the policy to offer financial protection in terms of benefits, social security and living costs in the foreign location. Second, the employee will expect a foreign assignment to offer opportunities for financial advancement through income and/or savings. Third, the employee will expect issues such as the cost of housing, education of children, and home leave to be addressed in the policy.
If we contrast the objectives of the MNE and the employee, we of course see the potential for many complexities and possible problems, as some of these objectives cannot be maximized on both sides. The 'war stories' about problems in international compensation that we see in HR practitioner magazines is testimony to these complexities and problems. McNulty et al. also allude to these problems in their studies of expatriation, particularly in the Asia Pacific region.16
However, if we take away the specialist jargon and allow for the international context, are the competing objectives of the firm and the employee fundamentally different from that which exists in a domestic environment? We think not. We agree with the broad thrust of an influential article by Milkovich and Bloom17 which argues that firms must rethink the traditional view that local conditions dominate international compensation strategy. This is again another application of the ongoing balancing act between global standardization and local customization. We will return to these issues at the end of the chapter after we have covered some of the technical aspects and complexities of compensation in an international context.
KEY COMPONENTS OF AN INTERNATIONAL COMPENSATION PROGRAM FOR EXPATRIATES
The area of international compensation is complex primarily because multinationals must cater to three categories of employees: PCNs, TCNs and HCNs. In this section, we discuss key components of international compensation as follows.
Base salary
The term base salary acquires a somewhat different meaning when employees go abroad. In a domestic context, base salary denotes the amount of cash compensation serving as a b.
Components Of International Compensation program For assignmentBiswasbusiness.com
Components Of International Compensation program
this is the basic knowledge for peoples.......................Improve organizational and employee productivity without increasing base pay fixed costs using incentive programs that organize improvements in employees, work unit, and organizational performance.
Increasing organizational productivity is one of the hottest current topics in executive suites. Managers know that simply paying employees more will not result in increased output and improved quality.
All employees now recognize the importance of cooperative effort and the need to improve quantity and quality of organizational output.
1) The document discusses factors that organizations must consider when developing an international compensation policy, including employment laws, economic conditions, and attracting and retaining qualified staff.
2) Expatriate costs are typically much higher than local employees due to allowances for housing, taxes, and other expenses associated with living abroad.
3) Effective compensation policies balance maintaining purchasing power for expatriates with incentives, equity between employees, and ease of administration across different locations.
Dr. Jhansi Rani M R - International CompensatIon (Module VI B)MRJhansiRani
Dr. Jhansi Rani M R, Dr. M. R. Jhansi Rani, Approaches of international compensation, key components of an International compensation program, executive compensation.
Apple Inc. has an elaborate international human resource management system to train employees, deploy them across different countries, and assess their performance on foreign assignments. Pre-departure training covers cultural customs, language, and business etiquette of the host country. Apple recruits and selects expatriates based on their cross-cultural and interpersonal skills to reduce failure rates in foreign assignments.
There are several key issues to consider in international compensation management:
1. Compensation packages typically include a base salary, allowances, benefits, and consideration of taxes.
2. Packages aim to maintain an expatriate's home country standard of living through the balance sheet approach or match local pay through the going rate approach.
3. Social security systems differ globally and must address issues like benefit portability and which country is responsible for payments.
Northern miner t&c for mobile employees - jan 2013 cleanCareersinmining
The cachet of working abroad no longer exists for younger generations. Younger employees value community and raising families close to support systems more than international assignments. Successful companies will attract mobile talent by developing thoughtful policies addressing career paths, compensation, benefits, taxation, relocation and home leave to support employees and families abroad. Developing unique programs aligned with company culture and values will be key to retaining mobile talent in an increasingly competitive environment.
The document discusses whether additional short-term disability insurance is needed beyond an employer-provided policy. It notes that supplementary coverage may be necessary if there is a significant gap between living expenses and the income replacement from the employer policy. Key factors to consider include estimating living expenses, maintaining long-term savings goals, and understanding preexisting condition limitations.
The document discusses objectives, philosophy, and strategies for international compensation management. It aims to attract competent expatriates, facilitate movement between subsidiaries and countries, provide consistent pay levels, and be cost-effective. A compensation philosophy guides goals, pay mix, performance appraisal linkage, and market positioning. Compensation is designed based on business inputs, market trends, and employee preferences. Elements include base salary, incentives, allowances, long-term benefits, and taxes, which are administered through salary increases, bands, job rates, and performance appraisals.
This document defines and provides examples of fringe benefits, which are non-wage compensation provided to employees in addition to their normal salary. Fringe benefits can include healthcare, retirement benefits, housing allowances, cheap loans, and private vehicle usage. They are considered taxable income in many countries. Fringe benefits are advantageous for both employers and employees - employers can attract and retain talent while employees gain security. However, fringe benefits also incur tax and administrative costs. The document outlines specific fringe benefits that are taxed in countries like India, the UK, US, and Australia.
AEGON takes a closer look at one important reason for providing pensions – to incentivize employees to perform better and to raise employee commitment.
Understanding the new rules GOLAJN002MAY2915Rodney Horin
The document discusses new rules for Australia's aged care industry that took effect in July 2014, which made the system more complex and worse for middle-class families. It provides tips for reducing aged care fees, such as negotiating accommodation deposits, reducing income assessments, protecting pension entitlements, and examining extra service fees. Key decisions that require consideration include how to pay accommodation costs, whether to sell the family home, and how changes will impact pensions.
Major Aspects of An International Compensation PackageFatima Arshad
This document discusses components of expatriate compensation packages, factors affecting global compensation, and findings from a study on expatriate compensation among Finnish expatriates. The main components of compensation packages are base salary, allowances, benefits, incentives, and taxes. The study examined how background variables influence package design. It found that over 70% of expatriates received allowances, with about a third getting cost-of-living or overseas premium allowances. Determinants like sex, age, family situation, job level, and area of operation influenced package amounts.
Lester B. Pearson served as Prime Minister of Canada from 1963 to 1968. During his time as prime minister, he made significant changes that improved life for Canadians. He established universal healthcare across Canada, which provided medical coverage for all citizens. Pearson also oversaw the creation of Canada's new national flag and anthem, unifying national symbols that many Canadians identify with today. Additionally, he laid the groundwork for official bilingualism and multiculturalism as key principles in Canadian society and government. Pearson's changes helped modernize Canada and establish policies that promote inclusiveness, equality, and national pride for all citizens.
The document provides an overview and summary of a presentation on successful retirement planning. It discusses the current economic environment and where the economy has been, where it is now, and where it may be going. It also discusses employer-sponsored retirement plans and how they can fit different practices. The presentation was given by Tim Gaigals and covered topics like different types of retirement plans that are commonly used, when each type is best utilized, and how to design an effective retirement plan.
From General Motors company’s financial information, what type of pe.pdfnamarta88
From General Motors company’s financial information, what type of pension plan does it have?
Discuss the reasons why your company has chosen this particular plan.
What was the effect of the pension plan on General Motors company’s financial statements?
Defend your response.
Your CEO has informed you—the controller of General Motors company—that the board of
directors has made the decision to look at other options of
types of retirement plans. Investigate what other alternatives would be available, and determine
which would be appropriate for your particular company.
Solution
Types of Pensions
Employment-based pensions
A retirement plan is an arrangement to provide people with an income during retirement when
they are no longer earning a steady income from employment. Often retirement plans require
both the employer and employee to contribute money to a fund during their employment in order
to receive defined benefits upon retirement. It is a tax deferred savings vehicle that allows for the
tax-free accumulation of a fund for later use as a retirement income. Funding can be provided in
other ways, such as from labor unions, government agencies, or self-funded schemes. Pension
plans are therefore a form of \"deferred compensation\"
Social and state pensions
Many countries have created funds for their citizens and residents to provide income when they
retire (or in some cases become disabled). Typically this requires payments throughout the
citizen\'s working life in order to qualify for benefits later on. A basic state pension is a
\"contribution based\" benefit, and depends on an individual\'s contribution history. For
examples, see National Insurance in the UK, or Social Security in the United States of America.
Many countries have also put in place a \"social pension\". These are regular, tax-funded non-
contributory cash transfers paid to older people. Over 80 countries have social pensions.[4] Some
are universal benefits, given to all older people regardless of income, assets or employment
record. Examples of universal pensions include Zealand Superannuationand the Basic
Retirement Pension of Mauritius Most social pensions, though, are means-tested, such as
Supplemental Security Income in the United States of America or the \"older person\'s grant\" in
South Africa.
Disability pensions
Some pension plans will provide for members in the event they suffer a disability. This may take
the form of early entry into a retirement plan for a disabled member below the normal retirement
age.
Benefits
Retirement plans may be classified as defined benefit or defined contribution according to how
the benefits are determined.[8] A defined benefit plan guarantees a certain payout at retirement,
according to a fixed formula which usually depends on the member\'s salary and the number of
years\' membership in the plan. A defined contribution plan will provide a payout at retirement
that is dependent upon the amount of money contributed and the performance o.
This document summarizes a research paper about hardware-enhanced association rule mining using hashing and pipelining (HAPPI). The HAPPI architecture proposes three hardware modules: 1) a systolic array that compares candidate itemsets to a database to find frequent itemsets, 2) a trimming filter that determines item frequencies to eliminate infrequent items, and 3) a hash table that is used to filter unnecessary candidate itemsets. The HAPPI architecture aims to reduce the number of candidate itemsets and database items loaded into hardware to address bottlenecks in previous hardware approaches for association rule mining. Experimental results showed that HAPPI significantly outperforms previous hardware and software methods.
1. The document describes a proposed system called HAPPI (HAsh-based and PiPelIned) architecture for hardware-enhanced association rule mining. HAPPI aims to solve performance bottlenecks in existing Apriori-based hardware schemes by reducing the frequency of loading the database into hardware.
2. HAPPI includes three hardware modules - a systolic array to compare candidate itemsets with database items, a trimming filter to eliminate infrequent items, and a hash table to filter unnecessary candidate itemsets.
3. The proposed HAPPI system is intended to address limitations of existing Apriori-based approaches that involve repeatedly loading large candidate itemsets and databases into hardware.
The document discusses a facial recognition system based on locality preserving projections (LPP). It begins by explaining that existing facial recognition systems using PCA and LDA aim to preserve global structure but local structure is more important. It then proposes a system using LPP, which aims to preserve local manifold structure by modeling the image space as a nearest-neighbor graph. The system represents faces as "Laplacianfaces" in a low-dimensional subspace that preserves local structure for more accurate identification. It provides theoretical analysis showing how PCA, LDA and LPP can be derived from different graph models.
Facial recognition systems analyze facial images to identify individuals. They measure facial features to create a unique template for each face. Historically, early systems used neural networks to recognize aligned faces. More advanced techniques like eigenfaces, laplacianfaces, and locality preserving projections map faces into subspaces to analyze them. Facial recognition has improved accuracy in identifying faces with variations in expression. However, it has limitations as it only utilizes a subset of human facial nodal points and does not account for manifold structure or biometric characteristics. Future areas of development include 3D recognition and unobtrusive audio-video identification systems.
Worldwide market and trends for electronic manufacturing servicesStudsPlanet.com
New Venture Research Corporation is a market research and business development consultancy that has specialized in contract manufacturing and outsourcing for over 15 years. They produce widely quoted syndicated research on the electronics manufacturing services industry. The presentation summarizes trends in the worldwide electronics assembly market between 2007-2012, with the computer and communications segments growing the fastest. It also reviews growth in the EMS market by geographic region as well as direct labor costs and leading contract manufacturers in key regions like Mexico, Eastern Europe, and China. In conclusion, the author predicts continued strong growth in the EMS market, particularly in low-cost regions, over the next 5 years.
This document provides an executive summary of the world electronic industries from 2008 to 2013. It finds that while the electronics industry experienced a decline in 2009 due to the financial crisis, production of professional electronic equipment is expected to drive overall growth above average between 2008 and 2013. Specifically, industrial and medical electronics will contribute significantly to industry growth. Additionally, China is projected to outperform other regions in recovering from the economic downturn. The summary highlights innovation and integration across various applications as keys to the long-term prospects of the electronics industry.
The document summarizes Alfred Weber's locational theory model, known as the Weberian model or the least cost approach. The key points are:
1. The Weberian model explains the optimal location of industrial facilities using the locational triangle. Transportation is the most important element of the model.
2. Solving the Weber model involves three stages - finding the least transport cost location, adjusting for labor costs, and adjusting further for agglomeration economies.
3. Transportation cost is the primary factor in determining optimal location, according to the model. Labor costs and agglomeration economies are secondary adjustment factors.
Kluckhohn and Strodtbeck developed a model for analyzing and comparing cultures based on their underlying values and orientations. The model identifies six key dimensions along which cultures vary: humanity's relationship with nature, concepts of time, views of human activity, social relationships, basic human nature, and orientation towards space. These dimensions provide a framework for understanding differences in how cultures approach issues like social organization, time orientation, and human nature. While useful, the model is limited by its vagueness, difficulty of measurement, and lack of direct focus on business and management issues.
The document discusses Kluckhohn and Strodtbeck's model of cross-cultural value orientations, which identifies six basic dimensions that cultures vary along: relationship to nature, time orientation, activity orientation, relationships among people, human nature, and space/property. These dimensions influence a culture's values regarding important issues like work, family, and social relations. While insightful, Kluckhohn and Strodtbeck's framework has weaknesses like being vague, difficult to measure, and not directly addressing business and management concerns.
This document outlines a model mediation procedure and agreement for intellectual property disputes in the UK. It provides guidance for conducting a mediation, including procedures for exchanging information, conducting the mediation, reaching and formalizing any settlement agreement, ensuring confidentiality, and allocating costs. Key aspects include having representatives with full authority to settle, preparing concise case summaries and documents to share, maintaining confidentiality of mediation discussions, and jointly sharing mediation fees and expenses.
Trompenaars and Hampden-Turner identified seven cultural dimensions along which cultures can be classified based on their research on business executives. These seven dimensions are universalism versus particularism, communitarianism versus individualism, neutral versus emotional, diffuse versus specific cultures, achievement versus ascription, human-time relationship, and human-nature relationship. Their 1997 book "Riding The Waves of Culture" explores these seven value orientations between cultures.
Toyota built a new car factory in Burnaston, UK, creating over 3000 jobs. Burnaston was chosen as the site because it was a large, flat, greenfield site next to major roads with access to suppliers and a local workforce. The new factory had positive economic effects, including jobs, increased spending, and supplier companies moving to the area. However, it also increased traffic and destroyed greenfield land. While most benefits were local, there was a potential downside if it reduced sales or jobs elsewhere.
The International legal environment of businessStudsPlanet.com
The document discusses the international legal environment of business. It covers topics such as international law and agreements, business structures abroad, and dispute resolution. It also examines the international business environment, risks of international transactions, and origins and sources of international law. International business involves entities from multiple countries and issues around trade, capital, personnel across borders under different legal systems and government policies.
India's textile industry is one of the largest in the world, contributing 14% to industrial production and employing over 35 million people. It is the largest provider of employment after agriculture and earns 27% of India's total foreign exchange through textile exports. The industry has grown significantly since economic liberalization in 1991 and includes cotton, silk, wool, readymade garments, and hand-crafted textiles segments. It faces competition from countries like China but also has opportunities for growth in the domestic market and through trade agreements. The government is taking initiatives to support the industry through skills training programs and new textile parks.
This document discusses key concepts related to documentary sales and international transactions. It defines key terms like documentary sale, negotiability, bills of lading, and documentary draft. It explains the stages of a documentary transaction and how the risks are allocated between buyers and sellers under different trade terms like CIF. The document also summarizes several cases that illustrate how these concepts are applied, such as who is responsible if goods are stolen during transport depending on whether it is an FOB or CIF contract.
This document discusses various leadership roles and responsibilities. It begins by listing numerous roles of strategic leaders such as visionary, builder, acquirer, implementer, integrator, and motivator. It then provides more details on the roles of staying informed, promoting culture, adapting to change, exercising ethics, and making corrections. The document also discusses developing new capabilities through senior management intervention and cooperation. It outlines actions demonstrating social responsibility like family policies and community involvement. Finally, it discusses leading corrective adjustments through both reactive and proactive changes to strategy and alignment of activities.
The document provides information on various credit insurance products offered by ECGC (Export Credit Guarantee Corporation of India) to exporters and banks. It describes short-term and medium/long-term export credit insurance that protects against payment risks and lending risks. It also outlines domestic credit insurance, overseas investment insurance, and exchange fluctuation covers. Statistics on ECGC's growth over time and profiles of specific insurance policies are included.
This document discusses various methods for resolving international commercial and business disputes. It notes that international litigation can be complicated by differences in judicial systems and challenges enforcing judgments across borders. The International Court of Justice allows disputes between nations but not individuals. Arbitration and mediation provide alternatives where a neutral third party decides the outcome (arbitration) or makes non-binding suggestions to reach a settlement (mediation). Other options include negotiation, expert determination, and utilizing dispute resolution processes under international treaties like the World Trade Organization. Overall, the best approach is to prevent disputes through risk management and carefully drafting contracts.
This document provides an overview of India's foreign trade policy for 2009-2014. It discusses India's growing exports and trade share in recent years. It then outlines the economic crisis and declining exports. The policy aims to arrest this decline and achieve annual export growth targets. It describes various components of the policy including import/export controls, duty exemption schemes, and promotional measures. Stimulus measures by the government and RBI to boost exports are also summarized.
This document discusses various types of multinational enterprises (MNEs) and their international operations. It defines MNEs as firms that engage in foreign direct investment and own or control value-adding activities in more than one country. The document also discusses measures of internationalization like the transnationality index. Finally, it covers topics like developing country MNEs, small and medium enterprises, and "born global" firms that seek international operations from the start.
3. Chapter Objectives
In the introductory chapter we described IHR managers as
grappling with complex issues:
Manage more activities from a broader perspective,
Be more involved in the lives of their far-flung
employees
Balance the needs of PCNs, HCNs and TCNs
Control exposure to financial and political risks and
Be increasingly aware of and responsive to host-
country and regional influences.
In this chapter, all of these issues and concerns are brought
out in a discussion of compensation issues. (cont.)
IBUS 618 Dr. Yang 3
4. Chapter Objectives (cont.)
Examine the complexities that arise when firms move from
Examine the complexities that arise when firms move from
compensation at the domestic level to compensation in an
compensation at the domestic level to compensation in an
International context.
International context.
Detail the key components of international compensation.
Detail the key components of international compensation.
Outline the two main approaches to international
Outline the two main approaches to international
compensation and the advantages and disadvantages of
compensation and the advantages and disadvantages of
each approach.
each approach.
Examine the special problem areas of taxation, valid
Examine the special problem areas of taxation, valid
international living cost data and the problem of managing
international living cost data and the problem of managing
TCN compensation.
TCN compensation.
Examine the recent developments and global
Examine the recent developments and global
compensation issues.
compensation issues.
IBUS 618 Dr. Yang 4
5. Introduction
Global compensation managers
increasingly deal with two areas of
focus.
They must manage highly complex and
turbulent local details, while
Concurrently building and maintaining a
unified, strategic pattern of compensation
policies, practices and values.
IBUS 618 Dr. Yang 5
6. Requirements for Successful
Compensation and Benefits
Knowledge of employment and taxation law,
customs, environment and employment
practices of many foreign countries
Familiarity with currency fluctuations and the
effect of inflation on compensation, and
A good understanding of why and when special
allowances must be supplied and which
allowances are necessary in what countries
Allwithin the context of shifting political,
Allwithin the context of shifting political,
economic and social conditions.
economic and social conditions.
IBUS 618 Dr. Yang 6
7. Objectives of International
Compensation
Should be consistent with the overall strategy,
structure and business needs of the multinational.
Must work to attract and retain staff in the areas
where the multinational has the greatest needs
and opportunities, hence must be competitive and
recognize factors such as incentive for foreign
service, tax equalization and reimbursement for
reasonable costs.
Should facilitate the transfer of international
employees in the most cost-effective manner for
the firm.
Must give due consideration to equity and ease of
administration.
IBUS 618 Dr. Yang 7
8. Expatriate Expectations
Financial protection in terms of benefits,
social security and living costs in the
foreign location.
Opportunities for financial advancement
through income and/or savings.
Issues such as housing, education of
children and recreation to be addressed in
the policy.
Career advancement and repatriation.
IBUS 618 Dr. Yang 8
9. Key Components of International
Compensation
The area of international compensation is
The area of international compensation is
complex, primarily because multinationals must
complex, primarily because multinationals must
cater to three categories of employees:
cater to three categories of employees:
PCNs, TCNs and HCNs
PCNs, TCNs and HCNs
Key Components:
Key Components:
Base salary
Base salary
Foreign services inducement
Foreign services inducement
Hardship premium
Hardship premium
Allowances
Allowances
Benefits
Benefits
IBUS 618 Dr. Yang 9
10. Base Salary
In a domestic context, base salary denotes the amount of cash
compensation serving as a benchmark for other compensation
elements (such as bonuses and benefits).
For expatriates, many allowances are directly related to base
salary (e.g. foreign service premium, cost-of-living allowance,
housing allowance)
It is the basis for in-service benefits and pension contributions –
may be paid in home or local-country currency.
The base salary is the foundation block for international
compensation whether the employee is a PCN or TCN.
Major differences can occur in the employee’s package depending
on whether the base salary is linked to the home country of the
PCN or TCN, or whether an international rate is paid.
IBUS 618 Dr. Yang 10
11. Foreign Service Inducement and
Hardship Premium
Parent-country nationals often receive a salary premium
as an inducement to accept a foreign assignment or as
compensation for any hardship caused by the transfer.
The definition of hardship, eligibility for the premium and amount
and timing of payment must be addressed.
In cases in which hardship is determined, U.S. firms often refer
to the U.S. Department of State’s Hardship Post Differentials
Guidelines to determine an appropriate level of payment.
Foreign service inducements are usually made in the
form of a percentage of salary, 5-40% of base pay.
Such payments vary, depending upon the assignment, actual
hardship, tax consequences and length of assignment.
More commonly paid to PCNs than to TCNs.
IBUS 618 Dr. Yang 11
12. Allowances
Multinationals generally pay allowances in order to
encourage employees to take international assignments
and to keep employees ‘whole’ relative to home standards.
Establishing an overall compensation policy can be very
challenging, partly because of the various forms of
allowances, such as:
Cost-of-living allowance
Housing allowance
Relocation allowance
Education allowance
Home leave allowance
Hardship allowance
IBUS 618 Dr. Yang 12
13. Cost-of-living Allowances (COLA)
COLA receives the most attention, to compensate for
differences in expenditures between the home country
and the foreign country (e.g., to account for inflation
differentials, currency fluctuations, etc.).
The COLA may also include payments for housing and
utilities, personal income tax or discretionary items.
The provision of a housing allowance implies that
employees should be entitled to maintain their home-
country living standards (or, in some cases, receive
accommodation that is equivalent to that provided for
similar foreign employees and peers).
International comparison of cost of living is difficult and
can be problematic.
IBUS 618 Dr. Yang 13
14. Relocation Allowances
Usually cover moving, shipping and storage charges,
temporary living expenses, subsidies regarding
appliance or car purchases (or sales) and down
payments or lease-related charges.
Allowances regarding perquisites (cars, club memberships,
servants and so on) may also need to be considered
(usually for more senior positions, but this varies according
to location).
These allowances are often contingent upon tax-
equalization policies and practices in both the home and the
host countries.
IBUS 618 Dr. Yang 14
15. Education Allowances
Expatriates’ children are an integral part
of any international compensation policy.
Allowances for education can cover items such
as tuition, language class tuition, enrolment
fees, books and supplies, transportation, room
and board and uniforms.
PCNs and TCNs usually receive the same
treatment concerning educational expenses.
IBUS 618 Dr. Yang 15
16. Allowances for Spouse Assistance
To help guard against or offset income lost
by an expatriate’s spouse as a result of
relocating abroad.
Some firms may pay an allowance to make up for a
spouse’s lost income.
U.S. firms are beginning to focus on providing
spouses with employment opportunities abroad,
either by offering job-search assistance or
employment in the firm’s foreign office (subject to a
work visa being available).
IBUS 618 Dr. Yang 16
17. Alternative Allowances
Housing alternatives may include:
Company-provided housing, either mandatory or optional
A fixed housing allowance
Or assessment of a portion of income, out of which actual
housing costs are paid.
Home leave alternatives:
Allow foreign travel rather than returning home
Expatriates may become more homesick than others who
return home for a ‘reality check’ with fellow employees and
friends.
As a firm internationalizes, formal policies become
more necessary and efficient.
IBUS 618 Dr. Yang 17
18. Benefits
In addition to the already discussed benefits,
multinationals also provide vacations and special
leave.
Annual home leave usually provides airfares for families to
return to their home countries.
Rest and rehabilitation leave, based on the conditions of the
host country, may provide the employee’s family with airfares
to a more comfortable location near the host country.
Emergency provisions are available in case of a death or
illness in the family.
Employees in hardship locations often receive additional
leave expense payments or rest and rehabilitation periods.
IBUS 618 Dr. Yang 18
19. Issues Concerning Benefits
Very difficult to deal with country-to-country, as
national practices vary considerably:
Transportability of pension plans
Medical coverage
Social security benefits
Firms need to address many issues, including:
Whether or not to maintain expatriates in home-country
benefit programs, particularly if the firm does not
receive a tax deduction for it.
Whether firms have the option of enrolling expatriates in
host-country benefit programs and/or making up any
difference in coverage.
Whether expatriates should receive home-country or
host-country social security benefits.
IBUS 618 Dr. Yang 19
20. Issues Concerning Benefits (cont.)
Laws governing private benefit practices differ from
country to country, and firm practices also vary.
In some countries, expatriates cannot opt out of
local social security programs. In such
circumstances, the firm normally pays for these
additional costs.
European PCNs and TCNs enjoy portable social security
benefits within the European Union.
Multinationals have generally done a good job of
planning for the retirement needs of their PCNs, but
this is generally less the case for TCNs.
IBUS 618 Dr. Yang 20
21. Approaches to International
Compensation
There are two main options in the area of
international compensation
Going Rate Approach (also referred to as
Going Rate Approach (also referred to as
the Market Rate Approach)
the Market Rate Approach)
Balance Sheet Approach (also known as
Balance Sheet Approach (also known as
the Build-up Approach).
the Build-up Approach).
IBUS 618 Dr. Yang 21
22. Going Rate Approach
Based on local market rates
Based on local market rates
Relies on survey comparisons among
Relies on survey comparisons among
Local nationals (HCNs)
Local nationals (HCNs)
Expatriates of same nationality
Expatriates of same nationality
Expatriates of all nationalities
Expatriates of all nationalities
Compensation based on the selected survey
Compensation based on the selected survey
comparison
comparison
Base pay and benefits may be supplemented
Base pay and benefits may be supplemented
by additional payments for low-pay countries.
by additional payments for low-pay countries.
IBUS 618 Dr. Yang 22
23. Advantages and Disadvantages of
the Going Rate Approach
Advantages
Advantages Disadvantages
Disadvantages
Equity withy local
Equity withy local Variation between
Variation between
nationals
nationals assignments for
assignments for
Simplicity
Simplicity same employee
same employee
Identification with Variation between
Variation between
Identification with
host country expatriates of
expatriates of
host country
Equity among same nationality in
same nationality in
Equity among
different countries
different countries
different
different
Potential re-entry
nationalities
nationalities Potential re-entry
problems
problems
IBUS 618 Dr. Yang 23
24. The Balance Sheet Approach
The basic objective is to ‘keep the expatriate whole’
through maintenance of home-country living
standard plus a financial inducement to make the
package attractive.
Home-country pay and benefits are the foundations
of this approach
Adjustments to home package to balance additional
expenditure in host country
Financial incentives (e.g., expatriate/hardship
premium) added to make the package attractive
Most common system in usage by multinationals
IBUS 618 Dr. Yang 24
25. Major Categories Incorporated in
the Balance Sheet Approach (cont.)
Goods and services
Home-country outlays for items such as food, personal
care, clothing, household furnishings, recreation,
transportation, and medical care.
Housing
Major costs associated with housing in the host country.
Income taxes
Parent-country and host-country income taxes.
Reserve
Contributions to savings, payments for benefits, pension
contributions, investments, education expenses, social
security taxes, etc.
IBUS 618 Dr. Yang 25
26. Additional Costs
A Typical Balance Sheet Paid by Company
Home- and
Premiums and
Host-Country Income
Incentives
Income Taxes Taxes
Income
Income Housing Taxes
Taxes Housing Housing
Housing
Goods and Goods and
Goods and Goods and
Services Services Services Services
Reserve Reserve Reserve Reserve
Host-Country Home-Country
Home-Country Host-Country Costs Paid by Equivalent
Salary Costs Company and Purchasing
from Salary Power
IBUS 618 Dr. Yang 26
28. Example of an Expatriate
Compensation
An expatriate working in a U.S. branch may
receive:
Base pay: $1,400/mon
Housing: up to $1,400/mon (Optional)
Itemized reimbursement: $500/mon
Discretionary expense (e.g., gifts & gratuity to
clients and partners): $1000/special holidays
Benefits: Social security/Medicare (Optional)
Health care: $200/mon paid by employer
Unemployment coverage
Workers comp
IBUS 618 Dr. Yang 28
29. An U.S. Expatriate Compensation
A U.S. expatriate working for a Chinese university:
Base pay variation: $1,500-$10,000/mon
Housing: Free for initial 6 months or up to a lump sum
subsidy of $1,500-10,000 for a contract of 3 years or
above (optional)
Benefits: Pension coverage for a 5 year contract or paid
at the option of the expatriate
Health care: Completely paid by employer or optional
incentive to the expatriate
Home leave 1-2 times/Yr
Paid vacations and observed Chinese holidays
Initial research launch grant: $10,000
IBUS 618 Dr. Yang 29
30. Advantages and Disadvantages of
the Balance Sheet Approach
Advantages:
Advantages: Disadvantages:
Disadvantages:
Equity
Equity Can result in great
Can result in great
Between
Between
disparities
disparities
assignments
assignments Between expatriates
Between expatriates
Between Expatriates of different
of different
Between Expatriates
of the same nationalities
nationalities
of the same
nationality
nationality Between expatriates
Between expatriates
Facilitate re-entry
Facilitate re-entry and local nationals
and local nationals
Easy to communicate to Can be complex to
Can be complex to
Easy to communicate to
employees administer
administer
employees
May entail difficulty to
May entail difficulty to
attract human capital
attract human capital
IBUS 618 Dr. Yang 30
31. Taxation
This aspect of international compensation probably
causes the most concern to HR practitioners and
expatriates (both PCNs and TCNs), as taxation generally
evokes emotional responses. No one enjoys paying
taxes, and this issue can be very time consuming for both
the firm and the expatriate.
An assignment abroad can mean that a U.S. expatriate is
taxed both in the country of assignment and in the USA.
This dual tax cost, combined with all of the other
expatriate costs, makes some U.S. multinationals think
twice about making use of expatriates.
IBUS 618 Dr. Yang 31
32. Approaches to Handling
International Taxation:
Tax Equalization
Firms withhold an amount equal to the home-
country tax obligation of the PCN, and pay all taxes
in the host country.
Tax Protection
The employee pays up to the amount of taxes he or
she would pay on compensation in the home
country. In such a situation, the employee is
entitled to any windfall received if total taxes are
less in the foreign country than in the home
country.
IBUS 618 Dr. Yang 32
33. Tax Equalization
By far the more common taxation policy used by
multinationals.
For a PCN, tax payments equal to the liability of a home-
country taxpayer with the same income and family status
are imposed on the employee’s salary and bonus.
Any additional premiums or allowances are typically paid by
the firm, tax-free to the employee.
As multinationals operate in more and more countries,
they are subject to widely discrepant income tax rates.
Just focusing on income tax can be misleading, as the
shares of both personal and corporate taxes are rising
in the OECD countries.
IBUS 618 Dr. Yang 33
34. Diversity in National Taxation
If we look at total tax revenues as a percentage of GDP,
the “top five” highest taxation countries are:
Sweden, Denmark, Finland, France and Belgium
The United States is 25th with the other large advanced
economies towards the bottom of the list
Japan, 26th; Britain, 16th; and Germany, 12th.
International accounting firms may provide advice and
prepare host-country and home-country tax returns for
their expatriates.
Increasingly, firms are also outsourcing the provisions of
further aspects of the total expatriate compensation
packages including a variety of destination services in lieu
of providing payment in a package.
IBUS 618 Dr. Yang 34
35. Approaches to International
Compensation
Multinationals need to consider the extent to which
specific practices can be modified in each country to
provide the most tax-effective, appropriate rewards for
PCNs, HCNs and TCNs within the framework of the
overall compensation policy of the firm.
The difficulties in international compensation “are not
compensation so much as benefits”:
Pension plans are very difficult to compare or equalize
across nations, as cultural practices vary endlessly.
Transportability of pension plans, medical coverage and
social security benefits are very difficult to normalize.
IBUS 618 Dr. Yang 35
36. Issues Concerning Benefits
Companies need to address whether or not to maintain
expatriates in home-country programs, particularly if the
company does not receive a tax deduction for it.
Whether companies have the option of enrolling expatriates in
host-country benefit programs and/or making up any difference in
coverage.
Whether host-country legislation regarding termination affects
benefit entitlement.
Whether expatriates should receive home-country or host-country
social security benefits.
Whether benefits should be maintained on a home-country or
host-country basis, who is responsible for the cost.
Whether other benefits should be used to offset any shortfall in
coverage and whether home-country benefit programs should be
exported to local nationals in foreign countries.
IBUS 618 Dr. Yang 36
37. International Costs of Living
Multinationals using the Balance
Multinationals using the Balance A recent survey of living
A recent survey of living
Sheet Approach must constantly
Sheet Approach must constantly costs ranked the 10 most
costs ranked the 10 most
update compensation packages
update compensation packages expensive cities as:
expensive cities as:
with new data on living costs,
with new data on living costs, 1. Tokyo
1. Tokyo
which is an on-going
which is an on-going 2. Moscow
2. Moscow
administrative requirement.
administrative requirement. 3. Osaka
3. Osaka
Must also be able to respond to
Must also be able to respond to 4. Hong Kong
4. Hong Kong
unexpected events, such as the
unexpected events, such as the 5. Beijing
5. Beijing
currency and stock market
currency and stock market 6. Geneva
6. Geneva
crash, which suddenly unfolded
crash, which suddenly unfolded 7. London
7. London
in a number of Asian countries
in a number of Asian countries 8. Seoul
8. Seoul
in late 1997.
in late 1997.
9. Zurich
9. Zurich
The level of local knowledge
The level of local knowledge 10. New York
10. New York
requires specialist advice.
requires specialist advice.
IBUS 618 Dr. Yang 37
38. A Wider View on Business Costs
Relate costs of doing business in different economies to
statistic measures of:
Wages
Costs for expatriate staff
Air travel and subsistence
Corporation taxes
Perceived corruption levels
Office and industrial rents
Road transport.
Generally the developed countries tend to rank as more
expensive than developing countries because their wage
costs are higher, but nothing is absolute.
IBUS 618 Dr. Yang 38
39. Some Tentative Conclusions:
Patterns in Complexity
It may be that international compensation
administration is more complex than its domestic
counterpart, but not radically different in pattern or
form.
Recent developments in the study of global pay
issues may be seen to operate at three distinct
levels:
The basic level of cultural values and assumptions;
The level of pay strategy, practices and systems
design;
The level of pay administration and form.
IBUS 618 Dr. Yang 39
41. Some Tentative Conclusions:
Patterns in Complexity (cont.)
At the level of cultural values, a debate is ongoing
between
Advocates of pay systems that value competitive
individualism and result in ‘hierarchical’ pay systems
with large pay differentials for executives, market-
sensitive professions and other ‘critical’ employee
groups, and
Advocates of pay systems that value cooperative
collectivism and result in more ‘egalitarian’ pay
systems with smaller pay differentials and more
shared group or firm-wide reward practices.
IBUS 618 Dr. Yang 41
42. Chapter Summary
In this chapter, we have examined the
complexities arising when firms move from
compensation at the domestic level to
compensation in an international context.
It is evident from our review that
compensation policy becomes a much less
precise process than is the case in the
domestic HR context.
To demonstrate this complexity, we have:
IBUS 618 Dr. Yang 42
43. Chapter Summary (cont.)
Detailed the key components of an international compensation
program.
Outlined the two main approaches to international
compensation (the Going Rate and the Balance Sheet) and
contrasted the advantages and disadvantages of each
approach.
Outlined special problem areas such as taxation, obtaining
valid international living costs data, and the problems of
managing TCN compensation.
Presented a model of global pay that highlights the complexity
and yet familiarity of pay practices in the global context.
The combination of pay decisions based on strategic global
standardization and sensitivity to changing local and regional
conditions that characterizes the state of international pay
practices. IBUS 618 Dr. Yang 43
44. Implications for IHRM
Providing a strategic yet sensitive balance
Providing a strategic yet sensitive balance
can only be achieved by creating and
can only be achieved by creating and
maintaining professional networks,
maintaining professional networks,
comprised of home office and local
comprised of home office and local
affiliate HR practitioners, outsourcing
affiliate HR practitioners, outsourcing
selected activities through specialist
selected activities through specialist
consultants, and a close cooperation with
consultants, and a close cooperation with
local and regional governments and other
local and regional governments and other
key local institutions.
key local institutions.
IBUS 618 Dr. Yang 44