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Unit 8: International Compensation

Benefit: An indirect reward given to the employees as a part of the organisational membership. Notes
Compensation: It is the financial remuneration the employees receive in exchange for their
labour.

Going Rate Approach: The base salary for international transfer is linked to the salary structure
in the host county.
Job Evaluation: The process of assessing the values of the jobs within the organisation.

Stock Options: It is the contract which gives the recipient the right to buy the shares of the stock
at a pre-specified exercise price for a pre-specified term.
Vesting: The period of time before the recipient has the right to transfer shares and realise value.
Vesting can be based on time, performance or both.

8.7 Review Questions

1. Examine the key components of an international compensation plan for an international
firm.
2. Analyse the approaches for the international compensation plan.
3. Being a corporate HR, explain your plan/approaches you will follow for handling
international taxation of the employees.
4. You are the HR manager of international firm. Devise the compensation plan for the
middle-level executive.

5. What factors you will consider in devising a compensation plan for the expatriate?
6. Devise the strategies for the growth of the executive compensations.
7. Critically analyse the need for a compensation plan in the organisation.

8. You are the employee of a company which has recently decided to send you abroad for the
assignments. Outline your expectations from the company in terms of compensation.
9. “Certain knowledge of national tax structure regarding expatriate income is important
while devising international compensation policy”. Justify.
10. Being the HR manager of the firm, give a detail outline of the compensation management
in international context.

11. “Compensation policy of a company helps in attracting and retaining the talented pool”
Do you agree? Justify.

Answers: Self Assessment

1. True 2. True

3. False 4. False
5. Going rate 6. Host
7. Balance Sheet 8. Balance Sheet
9. Crafted 10. Base

11. Home 12. Housing

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