Human Resource Management: The Importance Of Compensation Management

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Compensation management is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees. Compensation includes payments such as bonuses, profit sharing, overtime pay, recognition rewards and sales commission. (JetHR, 2013). According to JetHr corporate strategy, compensation can also include non-monetary perks such as a company-paid car, company-paid housing and stock options. Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness. When it comes to international assignment management, expatriate compensation is the most strategic and fundamental role of its purpose. Yet as the savage rivalry for outside ability increments, compensating expatriates is undoubtedly becoming more and more complex. It was with a survey by Ernst and Young that fully capitalize on the importance of compensation for expatriates and how it benefits them. In the survey, the data analysis found that 67 percent of mobility managers reported that compensation packages as the largest arena where international assignee expectations are not met. The contributing factor highlights the changing economic environment such as exchange rates and their fluctuations, inflation, competition of locations in emerging markets, variable income tax rates, a scope of new recompense are being introduced. The importance of compensation management for expatriates
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