Attract and retain employees who are qualified and interested in international assignments.
Facilitate the movement of expatriates from one subsidiary to another, from home to subsidiaries, and from subsidiaries back home.
Provide a consistent and reasonable relationship between the pay levels of employees at headquarters, domestic affiliates, and foreign subsidiaries.
Align compensation administration with the strategy of the firm.
Increase and maintain employee motivation.
Must be perceived as fair by the employees.
Secure consistency between pay and performance & equity among employees of different nationalities and categories.
Assist the employee and family adapt to the host country culture.
Reduce employee grievances and simplify collective bargaining procedures.
Factors affecting the design of International Remuneration
Government Control and Regional Practices
Policies and trends
Economic history and trends
Union influence in the country
Premiums and allowances
Hardship and hazard/danger pay
Home country based/balance sheet
The headquarters-based approach
The host-country-based approach
Global market approach
Short-term incentive plans
Long-term incentive plans
An international assignment compensation system has to finely balance adequately rewarding and motivating expatriates while keeping costs under control for corporate headquarters.