Topic 19 (Balance sheet approach (Dowling et al 2004) (Đk thiết kế để…
Balance sheet approach (Dowling et al 2004)
Đây là cách được dùng phổ biến và rộng rãi nhất và nó đk dựa vào giá trị của 1 thị trường nhất định mà nó đk tìm thấy ở nước sở tại.
Đảm bảo rằng ng lao động nc ngoàicó thể có 1 cái standard living giống như ở nc cuả họ. Tránh để họ có những tổn thất trầm trọng khi thực hiện những nhiệm vụ ở nc ngoài.
1 khi mà lương cơ bản và lợi ích từ cty được ban hành, những sự điều chỉnh được tạo ra để cân bằng những khoản chi thêm mà lao động ở nc ngoài đối mặt.
Đk thiết kế để cover 4 categories của chi phí của MNCs và expatriates ở 1 location khi mà chi phí vượt quá ngưỡng tương đương so vs chi phí ở cty mẹ.
MNCs share cost associated with goods and services
MNCs share costs associated with housing in the foreign location
MNCs share costs associated with income taxes in both the expats home and host country
MNC provide what are known as reserves to expats in the form of investments etc
4 advantages to MNCs of using the balance sheet approach.
It creats perceptions of equity regarding foreign assignments for employees faced with choosing among locations.
It create perceptions of equity between parent country nationals since those working at HQ and those on foreign assignments are compensated equally
Facilitates re-entry for expatriates.
This system of pay and benefits is easy to communicate to employees.
May create feelings of disparity if expats discover that local nationals receive significantly or pay for performing the same job
May create problems when intellectual property issues or discovery of new processes through R&D are involve (Trommetter, 2010)
Motorola employee in Beijing saved the company millions of $ through his ideas but was well aware that his compensation was less than the US counterparts
May present MNCs with difficulties in helping expats cover goods and services, namely those regarding tax deductions & pension contributions.
Going-rate approach (Downling et al 2004)
Based upon typical market values found in the foreign country
To establish the expats base salary and benefits MNCs gather compensation info from local sources in the foreign environment to determine the best method of benchmarking.
Typically, the MNCs supplements both pay and benefits it the foreign location is considered a low pay country.
One simple but clever method of determining pay adjustment for expat. Assignments is the "Big Mac Adjustment"
Basically the cost of a McDonald's Big Mac sandwich is Used as a adjusting factor around the world; it serves as a common measure of cost - of - living differentials, corrects for fluctuations unavailable in last year's reports and is incredibly accessible.
It is easy to understand
Perceived equality that exists between expats and ;pva; matopma;s.
Expats pay can fluctuate considerably dus to disparities in pay between low to high-pay countries. Such variation can also occur when an expatriate moves between assignments within a country
International compensation: Programmes and components
According to Martocchio(2001), international compensation programmes usually consist of 5 areas:
primary component of the package.
: Specifics amounts of money paid out which are related to the assignments.
: Cover particular sums which may be required for expenses incurred in host country as a result of differences between means of living and in the home country.
: Medical plans, pension plans and social securrity.
: Sum provided on re-entry as well as during the assignment
Other issues in International compensation
Non - monetary compensation
: Much of the literature on international compensation takes n American-focused perspective, and does not consider the situation in countries, such as Germany, Sweden and japan, in which the company is seen as a provider if social welfare for employees
While many feel that it is an impossible task to develop universally, some large companies are participating in "multinational pools" with regard to their benefits and collecting all their insurance coverage around the worldin one network, with an insurance multinational, which saves money and resolves issues with international management. Cheffins (2003) argues that in fact, what seems like a globalising system is in fact the increasing adoption of American norms across the board, which may therefore not be applicable in all situations