0_EXPATRIATE COMPENSATIOsdgsN (Final).pptx

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1. International compensation Unit 2

2. What is compensation? ALL FORMS OF PAY OR REWARDS monitory and non- monitory

3. INDIRECT COMPENSATION

4. Cost-of- liviNg (COLA) Cost of transportation Furniture Appliances Medical Automobile Maintenance Domestic Help

5. Housing allowance Accommodation options available as per: Home country Similar foreign expats and peers Family size and job level Company quarters Fixed allowance across a particular job level Expatriate ‘Topping up’ as per personal preferences

6. Home leave allowance Leaves allowed while on expatriate assignment Allowance for trips back to home country each year Gives employees the opportunity to renew family and business ties Minimizes adjustment problems abroad

7. B ased on local market rates. R elies on comparisons of surveys of the following: - local nationals - expatriates of same nationality - expatriates of all nationalities pay packages. C ompensation is based on the selected survey comparison. B ase pay and benefits may be supplemented by additional payments for low pay countries. Going Rate Approach 1

8. GOING RATE APPROACH ADVANTAGES Equality with local nationals
Simplicity
Identification with the host country
Equity amongst different nationalities DISADVANTAGES Variation between assignments for the same employees
Variation between expatriates of same nationality in different countries
Potential re-entry problems in the home country

9. Balance sheet approach Basic objective is maintenance of home country living standard+ financial inducements Home country pay and benefits are the foundations of this approach Adjustments to home package to balance additional expenditure in host country Financial incentives (expatriate/hardship) allowances added to make the package attractive Most common system in usage of multinational firms 2

10. 4 categories of Balance sheet approach

11. 3

12. Different from other 2 approaches