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Unit 8: International Compensation
Notes
Task Critically analyse the compensation practices across India, USA, China and Japan.
Caselet International Packages
By Dona Dezube
Negotiating compensation can be tricky in the US, but if you’re offered an international
job, compensation issues grow exponentially more complex.
While packages differ by company, some items appear in most international employment
offers: a housing allowance, help paying taxes, spousal employment help and trips home.
Those extra items can more than double compensation.
Missing a big-ticket item will lower your living standard thanks to the extra costs of
international living, says Geoffrey Latta, executive vice president of ORC Worldwide, a
New York City-based workforce consultancy.
Location matters, too. “The way you negotiate your package and the things you put in
your package are highly dependent on the countries where you go,” says Alain Verstandig,
president of Net Expat, an Atlanta international relocation company.
Culture influences how and when an international salary is negotiated. In the UK, whether
the position is one with a new company or your current firm, start the conversation by
talking about your place on a team, achievements and your added value, and then discuss
salary.
In Shanghai, attitudes toward pay are split. “Anyone over 40 would be against talking
about money, but the younger generation is extremely direct about talking about money,
so analyse the age group of the recruiter,” Verstandig says.
Source: http://career-advice.boston.monster.com
8.3.1 Termination of Contract
One aspect of compensation that varies from country to country and has important implications
for both subsidiary HR managers and HQ-based managers is the issue of what happens if the
MNC decides to leave a foreign country or another firm takes over the management, and is not
interested in doing business in this country. When such a decision is made, termination liabilities
may result in significant payoffs to employees. By tradition, or law, or union contract, the MNC
may be required to pay up to two years’ salary to employees who are involuntarily terminated.
Self Assessment
Fill in the blanks:
10. ……… salary denotes the amount of cash compensation that serves as a benchmark for
other compensation elements.
11. The Cost-of-living Allowance (COLA) involves a payment to compensate for differences
in expenditures between the …….... country and the foreign country.
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