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International Remuneration (Types of Approaches (Balance Sheet, Going Rate…
International Remuneration
International Remuneration
Definition
Internal rate of return– monetary or non monetary rewards/package received for services or employment abroad
Includes the
base salary, benefits, perquisites
and
long term and short term incentives
Key Objectives
Attract employees who are qualified, experienced and interested in international assignments
Facilitate the movement of expatriate’s from one subsidiary to another, from home to subsidiary, and back from subsidiary to home
Provide a consistent and reasonable relationship between the pay levels of employees at headquarters, domestic affiliates and foreign subsidiaries
Be cost effective by reducing unnecessary expenses
Should be easily understood and easy to administer
Components of International Remuneration Package
Base salary
Benefits
Allowances
Taxes
Incentives
Long-term benefits
Types of Approaches
Balance Sheet
Going Rate
Hybrid
Headquarters
Negotiation
Lump sum
Cafeteria
Factors affecting International Remuneration
Internal variables
Ability to pay
Business Strategy
Job Evaluation and Performance Appraisal
Employee
External variables
Culture
Economic Factors
Taxation
Competitive labour market
Laws and Regulatoins
Standardization vs Localizatoin
Collective bargaining, employee representation and government mandates