Seminar 5 Case 5

Local and International? Managing Complex Employment Expectations

1. Describe the content of a traditional expatriate package, and the reasons of the company to provide such
benefits! What limitations do you see in this contract when it comes to handling the company’s
emerging needs?
Traditional Expatriate Package (Dowling, 2013)
 Assignment no longer than three years and returns to home country when the contract ends
 Home based salary and incentives
 Abroad allowance for adjustment
 Medical check up
 Visa and permits
 Cost of travel
 Housing and school allowances
 Local bonuses
 Compensation approach
o Balance sheet approach

Limitations (Dowling, 2013)

 Compensation inequality
 Cost to float an expatriate hire

3. Compare the employers’ and employees’ needs regarding international mobility on a local international
contract. What elements would have to be included in a package if they were to answer to these needs?
Employer needs: Employee need:
 Increased workforce mobility  Smooth transition abroad
 Skilled workers  Allowance to live comfortably
 Cost effective
 Retention
Elements necessary: Elements necessary:
 Flexible duration  Supportive expatriate program
 Cost reduction by the company  Financial incentive
 Incentive programs to keep the
employee engages and feeling a sense
of value
 4. To what extent do you believe the distinction between the three groups of assignment packages
(expatriate contract for expatriates, local international contract for local international hires and local
contract for external international new recruits) to be fair? To this end (a) refer to equity theory and
determine the referent person in each of the three cases and (b) discuss the role of procedural justice!
What can the company do to provoke positive behavioral intentions in reaction to the packages?

Local contract International local contract Expatriate contract

 Local salary  Local salary with  Home and abroad pay
 New hires benefits  Talent employees
 Talent employee  3 year contract
 2 year contract
The company can provoke positive behavioral intentions by:
 Transparent communication
 Create a standard for all expatriate employees
 Increases based on performance

5. What does the company need to take into consideration in order to make the Local International policy
for this new international employee population be applicable on a global basis? Formalize your
arguments and propose a suggestion of a policy framework.
 Incentives
 Transparent communication
 Managing expectations
These three areas provide a strong support to the employee.

Reference:

Dowling, P., Festing, M., & Engle, A. (2013). International human resource management (6th ed.).
Andover: Cengage Learning.