Department of Human Resource Development

Name: - Zena Mehta

Class: - IHRD Sem-10

Roll No.: - 13

Subject: - Compensation Management

Topics: - 1. Job specification for the Labor Officer

2. Components of International
Compensation.

Submitted to: - Ms. Akshata Jain

 1. Job specification for the position of Labor Office

Summary

This job is to drive the practices of Legal compliance or Statutory compliance

and to foster the smooth Process.

1. Education Qualification: MLW, MBA – HR, PGDLR, MA – HRD, MSW

2. Experience: 2-3 Years (Must be in Manufacturing field)
3. KSA:

Knowledge Skills Ability

- A person must - Negotiation Skills - Problem Solving

have knowledge of practicality - Managerial Skills - Grievance Handling
of Labor Law - Communication Skills - Conflict Management
- Must be updated with the - Inter – Personal Skills - Dependability
current scenario & Provision - Convincing Power - Spontaneous
in the Labor Industry - Versatile
- Must have knowledge of four
Labor Codes

4. Work Orientation: A person has to carry out the Welfare activities for the labor
for which needs Research work.
- Also, A person will be Responsibility enough to handle any labor court related
hiring or any such law proceedings.
- A person has to be present at the Internal Audit process.
- A person needs to go outside to resolve the problems or issues.
- Field work will be there.
5. Age: 30-40
6. Linguistic Knowledge: Gujarati (Must), Hindi, English
 2. Components of International Compensation.

A global compensation plan includes elements typical of any rewards strategy

along with a few extra incentives and allowances, depending on the host country.

1. Base pay:
When an employee accepts an international assignment, it is up to the employer
to determine the base rate of pay (referred to as the base salary). The base salary is
normally related to pay ranges in the home country, which then may be adjusted based
on local variances (i.e., fluctuations in the economy). Companies take one of the
following approaches to establish base salaries for expatriates:

• The home-country-based approach. The objective of a home-based compensation

program is to equalize the employee to a standard of living enjoyed in his or her
home country. The 2016 Cartus Global Mobility Policy & Practices Survey found
that 76 percent of long-term assignments and 75 percent of short-term assignments
use a home country pay structure.1 Under this system, the employee's base salary is
broken down into four general categories: taxes, housing, goods and services, and
discretionary income.
• The host-country-based approach. With this approach, the expatriate employee's
compensation is based on local national rates. Many companies continue to cover
the employee in its defined contribution or defined benefit pension schemes and
provide housing allowances. Only 14 percent of long-term assignments and 5
percent of short-term assignments base pay on local rates, according to the Cartus
survey.2
• The headquarters-based approach. This approach assumes that all assignees,
regardless of location, are in one country (i.e., a U.S. company pays all assignees a
U.S.-based salary, regardless of geography). Cartus found that a small percentage of
companies use headquarters-based approaches for long-term assignments (4
percent) and short-term assignments (5 percent).3
• Balance sheet approach. In this scenario, the compensation is calculated using the
home-country-based approach with all allowances, deductions and reimbursements.
After the net salary has been determined, it is then converted to the host country's
currency. Since one of the primary goals of an international compensation
management program is to maintain the expatriate's current standard of living,
developing an equitable and functional compensation plan that combines balance
and flexibility is extremely challenging for multinational companies. To this end,
many companies adopt a balance sheet approach. This approach guarantees that
 employees in international assignments maintain the same standard of living they
enjoyed in their home country. A worksheet lists the costs of major expenses in the
home and host countries, and any differences are used to increase or decrease the
compensation to keep it in balance.

2. Variable/incentive compensation:

The globalization of business has increased the use of variable and incentive pay
around the world. But some cultures do not readily accept the practice of linking pay
to individual or group performance. Other roadblocks to pay for performance include
financial (not enough funding of the pool), target setting (defining performance
parameters) and pay equity. Yet when it is done right, pay for performance effectively
allocates limited rewards and retains top performers. As such, variable pay has become
an increasingly important compensation element in many countries.

Variable pay plans generally fall into one of two categories:

• Short-term incentive plans are usually annual plans that link awards based on
meeting individual or group performance criteria and objectives. Unlike long-term
plans, these incentives pay plans provide for the payout to be awarded yearly.
• Long-term incentive plans, on the other hand, can vary in length from three to five
years. These plans typically include equity-based incentives, such as stock options,
restricted share grants and other types of equity-based plans like phantom stocks or
stock appreciation rights. Awards are closely linked to the achievement of company
goals and objectives over the three- to five-year period.

Participation and eligibility for each type of plan, as well as the level of incentives and
average payouts, vary greatly among different companies, industries and countries
around the world. See Cash Long-Term Incentive Use Rises.

3. Premiums and allowances:

Premiums and allowances are added to the base salary so expatriate employees can
maintain their standard of living. Those add-ons are removed when the employee
repatriates. Some types of premiums and allowances are as follows:
• Hardship and hazard/danger pay. Employers sometimes need to send employees
on assignments to host countries where conditions are difficult or hazardous (i.e.,
remote locations or countries with high rates of violence). As a result, a hardship
allowance may be granted as an additional incentive to compensate employees for
accepting assignments in less-than-desirable countries. Premiums typically range
from 10 percent to 50 percent of base pay, depending on the severity of the hardship.
For assignments in developing countries that have a history of violence or are
experiencing political unrest, expatriates often receive some form of hazard pay,
such as an additional 25 percent of their base salary.
• Cost-of-living adjustments. A cost-of-living adjustment is an increase or decrease
of an expatriate employee's pay in response to fluctuations in the economy, such as
inflation or deflation. To prevent attrition of the global employee's purchasing
power, companies often raise the employee's base salary to keep up with inflation.
When price levels drop, companies may also decrease the base salary accordingly.
• Educational assistance. Educational assistance for dependents of expatriate
employees varies based on conditions in the host country. Assistance is usually not
provided if local educational institutions are deemed adequate. When the educational
system of the host country is substandard, employers may use a variety of benefits,
such as employers operating a school in the foreign country; paying for dependents'
educational expenses, including room and board, to attend schools in the United
States; or providing an allowance for attendance at private schools in either the
United States or the host country. Other employers may simply choose to pay
employees a specified amount (stipend) considered necessary for schooling at the
nearest adequate school, and the employees make up any difference to send their
dependents to an institution of their choice.
• Housing assistance. Assistance for housing is usually provided either in the form
of free company-owned housing or via a housing allowance that is typically equal
to the difference in housing costs between the home and host countries or based on
a specified percentage of an employee's base salary. Housing allowance rates are
usually calculated based on either a single person or a two-person household. For
employees with larger families living with them, employers may provide an
additional supplement, typically ranging from 10 percent to 30 percent of the two-
person allowance.
• Home leave. The objective of home leave policies is to give the assignee and his or
her family the opportunity to maintain personal and business relationships and
remain abreast of any economic, political, social or cultural changes in the home
country. Although home leave policies vary among multinational corporations, most
 policies grant leave based on the employee's level within the organizational
structure. Executives, managers and more senior-level professionals are most often
granted home leave once a year, or once every other year for a duration of up to four
weeks, and lower-level employees may be allowed only a single visit during the
course of their assignment. Companies that provide home leave allowances
generally purchase or reimburse the employee for any travel-related expenses, such
as airline tickets for the employee, spouse or partner and any dependent children
younger than college age.

4. Benefits

Global benefits for expatriates can be complicated for HR professionals to navigate,

given the myriad national health care and pension systems and the laws governing
foreign residents. See Do we have to offer the same benefits to our employees who
work in other countries as to the employees working in the United States? and Three
Pressing Expat Benefits Issues Impacting Multinationals.

Health care plans

Health care coverage can pose significant challenges for expatriate employees because
not all U.S. health care plans provide coverage for employees residing abroad. For this
reason, the practice of providing health care benefits varies greatly among
multinational companies. Multinational companies can provide coverage to employees
in one of the following ways: Include the assignee in an international health care plan.
Continue coverage under the U.S. health care plan. Provide coverage for the employee
through a host country health care plan.

Retirement plans

Regardless of the compensation approach a multinational company chooses to adopt,

most companies commonly provide assignees with the same level of Social Security
and pension plan benefit coverage, without any interruption in service, as enjoyed by
other employees in the home country location.

Some countries require expatriate employees to participate in their social security or

other government welfare benefit schemes. In this case, many companies provide for
reimbursement of any payments made to the host country's government scheme.
Spousal/partner assistance

Since approximately half of all U.S. marriages are dual-earner partnerships, dealing
with international assignments can pose significant challenges for the trailing spouse
or partner, the expatriate employee and the sponsoring organization.

Trailing spouses face many challenges to finding suitable employment in the host
country, including language and legal barriers as well as differences in educational,
professional or licensing requirements.

Assistance with job searches, visas or work permits, career and educational counseling,
and resume writing are just a few examples of the types of assistance a multinational
employer can provide spouses or partners of transferring employees. A less common
approach is to offer a financial sum to spouses of expatriate employees for any loss of
income resulting from the relocation. See Avert Assignment Failure: Support Spouses
in Overseas Relocations.