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Management
Managing people in a multinational context
Chapter Objectives
In this chapter we:
Examine the complexities that arise when firms move
from compensation at the domestic level to
compensation in an international context.
Detail the key components of an international
compensation program.
Outline the two main approaches to international
compensation and the advantages and
disadvantages of each approach.
Examine the special problem areas of taxation, valid
international living cost data and the problem of
managing TCN compensation.
Examine recent developments and global
compensation issues.
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IHRM Chapter 7
Terms
HRIS
allowances:COLA
housing
repatriation
home leave
base salary
education
benefits
relocation
Tax
spouse
equalization
assistance
Tax
global corporate
protection
culture
going rate
International base
approach
pay
balance sheet
approach
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IHRM Chapter 7
Table
7-1
Table
7-2
Advantages
Disadvantages
Variation between
assignments for
same employee
Variation between expatriates
of same
nationality in different
countries
Potential re-entry problems
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Table
7-3
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Table
7-4
IHRM Chapter 7
Table
7-5
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10
Table
7-6
Country
Argentina
Australia
Belgium
Brazil
Canada
China (Hong
Kong)
China
France
Germany
India
Italy
Japan
Malaysia
Maximum
marginal
rate (%)
35.00
47.00
50.00
27.50
29.00
20.00
45.00
48.09
42.00
33.66
43.00
37.00
28.00
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3.
4.
5.
12
Table
7-7
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Table
7-8
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Figure
Complexity,
7-1
global pay
IHRM Chapter 7
15
Discussion Questions
1. What should be the main objectives for a
multinational firm with regard to its
compensation policies?
2. Describe the main differences in the Going
Rate and Balance Sheet Approaches to
international compensation.
3. What are the key differences in salary
compensation for PCNs and TCNs? Do these
differences matter?
4. What are the main points that MNEs must
consider when deciding how to provide
benefits?
5. Why is it important for MNEs to understand the
vcompensation
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IHRM Chapter 7practices of other countries?