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International Compensation Case Study

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International Compensation International Compensation is defined as the provision of monetary and non-monetary rewards to employees for their performance at MNCs. Proper compensation practices can result in job satisfaction, motivation, low turnover and low absenteeism. When embarking on foreign assignments, organizations must consider how the expatriated will be rewarded or compensated. Since very few employees like the idea of foreign assignments, many companies offer special expatriate benefits and other financial incentives to encourage them to accept the assignment. In many cases, the assignment abroad is accompanied by a significant salary increase along with other expatriate benefits. Creating the best compensation package requires …show more content…

In some cases. This means receiving accommodation that is equivalent to that provided for similar foreign employees and peers. The amount of this allowance is also determined by family size and to some extent, job level. Home leave allowance is where the employer covers all expenses of one or more trips back home each year. The primary purpose of this is so the employees can maintain family and business ties which as a result helps them with easy readjustment when they are repatriated. Some organizations restrict the use of home leave allowance to travel home whilst some organizations give expatriates the option to travel to other foreign countries. However, employers must take into consideration that some expatriates who aren’t accustom to foreign travel, if given the choice to travel to anther foreign country rather than home, may become more homesick. Therefore, home leave allowance should be used for its normal purpose to reduce readjustment issues when the employees is …show more content…

The complexities of international benefits brings more difficulties than international compensation. Therefore, when considering benefits, MNEs must address the following issues: • Whether or not to maintain expatriates in home-country programs, particularly if the multinational does not receive a tax deduction for it. • Whether MNEs have the option of enrolling expatriates in host-country benefit programs and/or making up any difference in coverage. • Whether expatriates should receive home-country or are eligible to receive host-country social security benefits. Approaches to International Compensation There are two main approaches to international compensation, the Going Rate Approach and the Balance Sheet

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