Download - International Compensation Managament
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International Compensation Management
Presented by- Mr. Ronnie JosephS. Radhakrishnan
KapilShekhar
Sarath
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International compensation is
understood as provision of monetary
and non-monetary rewards, including
base salary, benefits, perquisites, and
long and short-term incentives, valued
by employees in accordance with their
relative contributions to performance.
Introduction
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ObjectivesAttract individuals who are
competentFacilitate movement of
expatriatesProvides reasonable relationship
between the pay levelBe cost-effectiveConsistent with the overall
strategy
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Theories of compensationContingency theoryResource-based theoryAgency theoryEquity theory
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Compensation strategy
Employee inputs and preferences
Business and operating inputs
Industry and Labor market practices and
trends
Compensation philosophy and objectives, based on the above three factors
ASSESSMENT
DESIGN
Base pay delivery
Fringe benefits
Compensation administration
Organization performance or variable pay, non-monetary and other monetary rewards and recognitions
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Components of compensation
salary
benefits
Long-term benefits
allowances
incentives
taxes
International compensation
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Long-term benefits-
employee stock option plan (ESOP)
restricted stock unit (RSU)
employee stock purchase plan(ESPP)
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Variables influencing compensation
MNC INTERNAL ENVIRONMENT
•GOAL ORIENTATION•CAPACITY TO PAY•COMPETITIVE STRATEGY•ORGANISATIONAL CULTURE•INTERNAL WORKFORCE COMPOSITION•LABOUR RELATIONS•SUBSIDIARY ROLE
MNC EXTERNAL ENVIRONMENT
•PARENT NATIONALITY•LABOUR MARKET CHARACTERISTICS•LOCAL CULTURE•HOME AND HOST COUNTRY GOVERNMENTS’ ROLES•INDUSTRY TYPE•COMPETITORS’ STRATEGIES
Staffing orientatio
n
International
compensation
strategy
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Compensation packagesGoing Rate ApproachBalance Sheet ApproachInternational Citizens’ Approach
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A Balance Sheet Approach
Income taxes
Housing
Goods and servicesReserve
Home-country salary
Home and host country income taxes
housing
Goods and servicesreserve
Home-country Costs
Income taxes
Housing
Goods and servicesReserve
Host-country costs paid by organization and from salary
Income taxes
HousingGoods and ServicesReserve
Home-country equivalent purchasing power
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Compensation administration
Compensation
Administration
Establish Salary Bands
Salary Increases/Reviews
Starting Salary for
New Employees
Linkages to Performance Appraisal
Developing rates of
pay for jobs
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Issues in international compensationImpact of human resources
demand-supply equationUse of global compensation and
benefits consultantsUse of SurveysOutsourcing Compensation
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Conclusion