The document discusses the challenges of providing benefits to globally mobile employees as national boundaries no longer define organizational structures, and outlines some basic principles for companies to consider when crafting short and long-term benefit plans, including whether employees will be in locations temporarily or for longer assignments, and ensuring medical coverage is adequately replicated across countries. It also notes additional lifestyle-oriented benefits and special considerations companies may want to include in international plans.
Компания: Комбайновый завод «Ростсельмаш»
Название проекта: Мировой рекорд Гиннеса по дискованию почвы, установленный на тракторе VERSATILE 535 (535 л.с.)
Компания:ОАО «МРСК Юга» (Открытое акционерное общество «Межрегиональная распределительная сетевая компания Юга»)
Название проекта: Конкурс детских творческих работ «Письмо ветерану», посвященный 65-летию Победы в Великой Отечественной войне Общество
Компания: Администрация Президента Карачаево-Черкесской Республики
Название проекта: Коммуникационная кампания Первого Всекавказского спортивно-культурного фестиваля «Кавказские игры-2010»
Talk I delivered April 25, 2014 to the "Gathering of Titan's" event in Boston, a room full of entrepreneurial CEOs, building businesses. Pulled from my "Way of Innovation," here are the five phases the journey of any innovator/ titan/ outthinker passes through:
1. Metal - grow discontented
2. Water - create possibility
3. Wood - formation, pushing through resistance
4. Fire - breakout, passing the tipping point
5. Earth - consolidating your gains
Then you destroy your innovation and start again, as Pablo Picasso said "All creativity is at first an act of destruction."
Link to book: http://www.amazon.com/Way-Innovation-Elements-Reinvent-Organization-ebook/dp/B0045U9UGQ/ref=sr_1_1?ie=UTF8&qid=1398457130&sr=8-1&keywords=way+of+innovation
Medgenics (NYSE AMEX: MDGN) is developing and commercializing Biopump, a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient's own skin biopsy for the treatment of a range of chronic diseases including anemia, hepatitis C and hemophilia. Medgenics believes this approach has multiple benefits compared with current treatments, which include regular and costly injections of therapeutic proteins.
Vringo (NYSE Amex: VRNG) is a provider of software platforms for mobile social and mobile video services. With its award-winning video ringtone application and other mobile software platforms - including Facetones™, Video Remix and Fan Loyalty - Vringo transforms the basic act of making and receiving mobile phone calls into a highly visual, social experience. Vringo’s video ringtone service enables users to create or take video, images and slideshows from virtually anywhere and turn it into their visual call signature. In a first for the mobile industry, Vringo has introduced its patented VringForward technology, which allows users to share video clips with friends with a simple call. Vringo’s Facetones™ product creates an automated video slideshow using friends’ photos from social media web sites, which is played each time a user makes or receives a mobile call. Vringo’s Video ReMix application, in partnership with music artists and brands, allows users to create their own music video by tapping on a Smartphone or tablet. Lastly, Fan Loyalty is a platform that lets users interact, vote and communicate with contestants in reality TV series that it partners with, as well as downloading and setting clips from such shows as video ringtones. Vringo’s video ringtone application has been heralded by The New York Times as "the next big thing in ringtones" and USA Today said it has "to be seen to be believed." For more information, visit: www.vringo.com
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.
Компания: Комбайновый завод «Ростсельмаш»
Название проекта: Мировой рекорд Гиннеса по дискованию почвы, установленный на тракторе VERSATILE 535 (535 л.с.)
Компания:ОАО «МРСК Юга» (Открытое акционерное общество «Межрегиональная распределительная сетевая компания Юга»)
Название проекта: Конкурс детских творческих работ «Письмо ветерану», посвященный 65-летию Победы в Великой Отечественной войне Общество
Компания: Администрация Президента Карачаево-Черкесской Республики
Название проекта: Коммуникационная кампания Первого Всекавказского спортивно-культурного фестиваля «Кавказские игры-2010»
Talk I delivered April 25, 2014 to the "Gathering of Titan's" event in Boston, a room full of entrepreneurial CEOs, building businesses. Pulled from my "Way of Innovation," here are the five phases the journey of any innovator/ titan/ outthinker passes through:
1. Metal - grow discontented
2. Water - create possibility
3. Wood - formation, pushing through resistance
4. Fire - breakout, passing the tipping point
5. Earth - consolidating your gains
Then you destroy your innovation and start again, as Pablo Picasso said "All creativity is at first an act of destruction."
Link to book: http://www.amazon.com/Way-Innovation-Elements-Reinvent-Organization-ebook/dp/B0045U9UGQ/ref=sr_1_1?ie=UTF8&qid=1398457130&sr=8-1&keywords=way+of+innovation
Medgenics (NYSE AMEX: MDGN) is developing and commercializing Biopump, a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient's own skin biopsy for the treatment of a range of chronic diseases including anemia, hepatitis C and hemophilia. Medgenics believes this approach has multiple benefits compared with current treatments, which include regular and costly injections of therapeutic proteins.
Vringo (NYSE Amex: VRNG) is a provider of software platforms for mobile social and mobile video services. With its award-winning video ringtone application and other mobile software platforms - including Facetones™, Video Remix and Fan Loyalty - Vringo transforms the basic act of making and receiving mobile phone calls into a highly visual, social experience. Vringo’s video ringtone service enables users to create or take video, images and slideshows from virtually anywhere and turn it into their visual call signature. In a first for the mobile industry, Vringo has introduced its patented VringForward technology, which allows users to share video clips with friends with a simple call. Vringo’s Facetones™ product creates an automated video slideshow using friends’ photos from social media web sites, which is played each time a user makes or receives a mobile call. Vringo’s Video ReMix application, in partnership with music artists and brands, allows users to create their own music video by tapping on a Smartphone or tablet. Lastly, Fan Loyalty is a platform that lets users interact, vote and communicate with contestants in reality TV series that it partners with, as well as downloading and setting clips from such shows as video ringtones. Vringo’s video ringtone application has been heralded by The New York Times as "the next big thing in ringtones" and USA Today said it has "to be seen to be believed." For more information, visit: www.vringo.com
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.
LABOUR MANAGEMENT IN CONSTRUCTION MANAGEMENT IN THE DEVELOPING COUNTRIESIAEME Publication
A number of assumptions will have been made in the tender on the likely make-up of the
labour force. Reconsideration of these is one of the key activities in the mobilization period.
AEGON takes a closer look at one important reason for providing pensions – to incentivize employees to perform better and to raise employee commitment.
The dilemma facing MNCs is determining the extent to which their HR policies should be 'convergent' worldwide to be the same in each location or 'divergence' to differentiate in response to local needs. Brewster et al. (2002) argue that the success of IHRM depends on MNC practices.
According to Brewster et al (2002) the effectiveness of global IHRM depends on ‘the ability to judge the extent to which an organization should implement similar practices across the world (convergence) or adapt them to suit local conditions (divergence)’. The dilemma facing all multinational corporations is that of achieving a balance between international consistency and local autonomy. They have to decide on the extent to which their HR policies should either ‘converge’ worldwide to be basically the same in each location, or ‘diverge’ to be differentiated in response to local requirements.
International Human Resource Management policy convergence and divergenceAparrajithaAriyadasa
FACTORS EFFECTING CONVERGENCE AND DIVERGENCE
Factors affecting the choice between convergence and divergence, Harris and Brewster (1999)
The extent to which there are well-defined local norms. •
The degree to which an operating unit is embedded in the local • environment.
The strength of the flow of resources – finance, information and people • – between the parent and the subsidiary.
The orientation of the parent to control. •
The nature of the industry – the extent to which it is primarily a domestic industry at local level.
The specific organizational competencies, including HRM, that are critical for achieving competitive advantage in a global environment.
Northern miner how to craft benefits for mobile miners - jan 2013
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C o m m entar y
How to craft benefits packages for
globe-trotting employees
Increasingly, corporate man- oriented features are in place in often even if the host country is better.
agement structures and areas of addition to catering to medical This can be a challenge for the employer
accountability no longer follow facility visits. who, looking to minimize costs, may want
the strict political boundaries Despite the differences in to use the local government plan in coun-
that define countries. taxation and diminishing cost tries where services are deemed ade-
As organizational lines blur, of living between countries, quate or superior to the home location.
so do the lines that define how government-provided benefits Make sure that the plan meets the ex-
employee populations are man- and company-provided sup- pectations of the employee and their fam-
aged. Mobile employees can plements are different when ily, and that the insurance provider ad-
By paul pittman
land anywhere in the world in special to the
compared country by country. ministers the plan to your exact
the pursuit of new deposits or northern miner There are different ways to specifications.
joint ventures, and employment provide employee benefits for Be wary of international providers
arrangements need to be flexible so that mobile employees, and the approach that that cannot refer you to other clients in
national boundaries do not create barri- meets the needs of your international your base location. This usually means
ers to the speedy and seamless transfer team will be determined by your talent- that they think they can follow a cookie-
of scarce skills between countries. management strategy, cultural values cutter approach in a new location,
Unfortunately, domestic benefit laws and the intended jurisdictions. which often leads to unforeseen conse-
and practices have not followed the ad- If you are sending employees to loca- quences with taxation, claims adminis-
vances in organization structures and tions where you do not have a local tration and banking.
continue to be country specific, creating business or employees with local-ben- In our experience, no two companies
challenges for mobile employees. efit arrangements, the simplest option want their benefit plans to work in the
As a further complication, the supply is to buy coverage through an interna- same way — but all insurers want their
of employees willing to relocate interna- tional plan for short-term benefits and administrative processes to be as stan-
tionally is diminishing as baby boomers retain the employee in home-country dard as possible. This is where the most
leave the workplace. The younger cohort plans for long-term coverage. Home due diligence should be spent, and an
replacing them are less enthusiastic country plans will generally be inade- expert’s opinion sought.
about working abroad. Many have trav- quate in the foreign location for medi- Ensure that there is a seamless process
elled widely as part of their education, cal and dental claims incurred in the for submitting and administering claims
and unlike their parents, they are likely host country. (to the two systems if that is what you
to leave far less to trust when it comes to Further, in the serious event of disable- select), that there are no unforeseen
details about their employment contract ment or death, most employees (and/or banking charges and that an efficient
and benefits arrangements. their families) will return to their home protocol is in place for dealing with set-
Mining companies already have to country. Having the appropriate plan offs and medical evacuations. Most in-
work hard to attract scarce skills. When providing these coverages avoids home surers, even the largest and most inter-
these are required for international as- and host tax and banking challenges. national, will promise a lot and fall short
signments, miners will also need to en- Medical coverage is the most impor- when it comes to tailoring plans to their
sure that robust benefit and safety net tant, most frequently used and often most clients’ needs.
arrangements are in place, that plans are challenging plan to replicate. Most inex- In recent years, more lifestyle features
globally competitive (as opposed to na- perienced expatriates will want a plan have appeared in international medical
tionally or regionally) and that lifestyle- that replicates their home country plan, plans that you will need to consider in
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Table 1: Basic principles to consider regarding benefits for internationally mobile employees.
Short term benefits Long term benefits
Talent management Special
(e.g. medical, (e.g. life, pension,
considerations considerations
dental, STD) LTD)
Employee will travel to the Consider frequent
Remain in home Remain in home
new work location for short traveler plan (travel &
country plan country plan
periods up to 3 months accomodation)
Employee likely to fulfill An international plan for
Enroll in host country Remain in home
assignment and return short term benefits would
plan country plan
home work equally well
Consider integration with
Enroll in international local medical plans if
Employee likely to go on plan distinct from home Enroll in international acceptable and home
further assignments in or local plan. Enroll in plan distinct from home country for family
several countries emergency medical and or local plan members located in a
political evacuation plan different country to the
work site
determining whether to include: medical and whether contributions result in an may be taxable. Using an insurer to cover
tourism, i.e., undergoing elective treat- accrued benefit is critical. risks in a country where the insurer is
ment in a third country, which can reduce Other benefits commonly provided not licensed to operate may also render
wait times for treatment and/or recovery; by government agencies (or legally medical, life and disability benefits fully
help lines with medical advice in the first mandated by governments) — includ- taxable.
language of the employee; an employee ing workers’ compensation, unemploy- Yours may be a junior mining com-
assistance plan designed for the interna- ment and maternity — will also work pany with no expatriate employees, and
tional family; non-traditional medical differently, and their impact in provid- it would be easy to assume that these
benefits, such as massage and naturopa- ing important security will need to be concerns do not apply. But if you have
thy; and legal and financial services for explored. a project abroad and people are travel-
employees in their new jurisdiction.
As the supply of employees willing The younger cohort replacing baby boomers are
to relocate diminishes and employers
work harder to persuade their best less enthusiastic about working abroad.
people to relocate, these features will
help you stand out and differentiate If you have benefit plans operating in ling from their work location to the site,
your employment brand. the host country and you intend to enroll increased medical, disability and other
It will also be important to understand transferring employees, ensure that risks exist that you need to mitigate.
how the host country’s social security prior service with the company can be Many new sites are in remote and
system works and the relationship be- recognized to meet any waiting or vest- often politically unstable locations, so
tween contributions and benefits in both ing periods, and that pre-existing condi- additional risks such as medical and po-
the home and host locations. Many tion limitations can be waived upon an litical evacuation, kidnap and ransom
countries have bilateral agreements that internal transfer. also need to be considered. Also make
facilitate integration between the coun- Income tax impact should also be ex- sure that the evacuation policy doesn’t
try’s plans. We have touched on medi- amined. Most savings or pension plans require a runway at the site (unless you
cal-plan integration but this could also that have a tax advantage in one country already have a jet aircraft-enabled one).
affect pension accrual, depending on will not have the same advantage in an- And don’t forget your directors. If they
whether the employee plans to return other country. Employee contributions have meetings at site or visit interna-
home for retirement or retire elsewhere. may not be deductible, and employer tional shareholders, they should also be
Understanding how reciprocity works contributions and investment returns included under these provisions.
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As the need for globally mobile em- much remains to be done to integrate HR positions with Alcan, RJR
ployees increases and candidates di- employee benefit arrangements. Nabisco/Japan Tobacco, Laidlaw
minish, employers will need to provide — Paul Pittman is the senior partner and Massey-Ferguson, and was the
the right benefit plans to attract, mobi- and founder of The Human Well Canadian HR practice leader for Ar-
lize and reward the talent needed to (www.thehumanwell.com), a col- thur Andersen. He has lived in the
grow their business. laborative HR consulting practice U.K., Canada and Switzerland, and
While strides have been made in free located in Oakville, Ont., with clients managed pension, benefit and com-
trade and capital flow across borders, globally. He previously held xecutive
e pensation plans globally.
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