INTERNATIONAL HUMAN RESOURCE MANAGEMENT（U. OF NEWCASTLE, AUSTRALIA; BETTY RYAN）PART 6-11.ppt

Chapter 6 Compensation Chapter objectives Chapter objectives (cont.) 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 the recent developments and global compensation issues. Introduction Global compensation managers (that is, everyone involved at any level in pay-related decisions) increasingly deal with two areas of focus. They must manage highly complex and turbulent local details while concurrently building and maintaining a unified, strategic pattern of compensation policies, practices and values. (cont.) Introduction (cont.) For multinationals successfully to manage compensation and benefits requires knowledge of employment and taxation law, customs, environment and employment practices of many foreign countries, familiarity with currency fluctuations and the effect of inflation on compensation and an understanding of why and when special allowances must be supplied and which allowances are necessary in what countries – all within the context of shifting political, economic and social conditions. Objectives of international compensation When developing international compensation policies, a firm seeks to satisfy several objectives. First, the policy should be consistent with the overall strategy, structure and business needs of the multinational. Second, the policy must work to attract and retain staff in the areas where the multinational has the greatest needs and opportunities. Hence the policy must be competitive and recognize factors such as incentive for foreign service, tax equalization and reimbursement for reasonable costs. (cont.) Objective