Académique Documents
Professionnel Documents
Culture Documents
International Compensation
1
Chapter Learning Objectives
• HRIS Allowances:
• repatriation COLA
• base salary housing
• benefits home leave
• education
tax equalization
relocation
• tax protection spouse assistance
3
Opening Vignette
4
Complexity of International
Compensation Policies
5
Global Compensation
6
Global Compensation
Increased complexities
• growing use of outsourced activities and subsequent
labour pricing needs
8
Total Compensation
Management
Requires knowledge of
• special allowances
9
Global Compensation
Programs
• labour costs
• internal equity
• effective governance
10
Global Compensation
Programs ( IHRM Today 7.2)
Key areas
11
Objectives of International
Compensation
Organizational
• consistent with the overall strategy, structure, and business
needs
• attract and retain staff; competitive, incentives for foreign
service, tax equalization
• facilitate the cost-effective transfer of international
employees
• equitable and easy to administer
12
Objectives of International
Compensation
Individual
• base salary
• allowances
• benefits
14
Base Salary
15
Foreign Service Inducement/
Hardship Premium
16
Foreign Service Inducement/
Hardship Premium
Must address
17
Allowances
18
Cost‑Of‑Living Allowance
(COLA)
19
Housing Allowances
21
Education Allowances
• tuition
• language class tuition
• enrolment fees
• books and supplies
• transportation
• room and board
• uniforms
• local/boarding school or university
22
Relocation Allowances
23
Spouse Assistance
24
Tax‑Equalized Housing
Allowance
25
Benefits
26
Issues When Considering
Benefits
Whether
• to maintain expatriates in home-country programs,
particularly if the firm does not receive a tax deduction
for it
• firms have the option of enrolling expatriates in host-
country benefit programs and/or making up any
difference in coverage
• expatriates should receive home-country or host-country
social security benefits
27
Approaches to International
Compensation
28
Going Rate Approach (Table 7-1)
29
Advantages and Disadvantages of the
Going Rate Approach (IHRM Notebook 7.1)
Advantages Disadvantages
32
Expatriate Compensation Worksheet
(Table 7-3)
33
Advantages and Disadvantages of the
Balance Sheet Approach (IHRM Notebook
7.3)
34
Tax Equalization
35
Tax Protection
36
Maximum Marginal Federal Tax
Rates (Table 7.4)
Argentina 35.00
Australia 47.00
Belgium 50.00
Brazil 27.50
Canada 29.00
China (Hong Kong) 20.00
China 45.00
France 48.09
Germany 42.00
India 33.66
Italy 43.00
Japan 37.00
Malaysia 28.00
37
Expatriate Benefits
(IHRM Notebook 7.4)
38
Social Security Contributions By
Employers and Employees (Table 7.5)
39
Range of Working Times Required to
Buy One Big Mac (Table 7.6)
40
Differentiating Between
PCNs and TCNs
41
Differentiating Between
PCNs and TCNs
42
Complexity, Challenges and Choices
in Global Pay (Figure 7.1)
43
Discussion Questions
44
Discussion Questions
4. What are the main points that MNEs must consider when
deciding how to provide benefits?
45
Case: Going to India
47