The document discusses the components of international compensation packages. It identifies three core sections: 1) core compensation including base pay and incentives like foreign service premiums and hardship allowances, 2) fringe benefits such as health insurance and relocation assistance, and 3) rest and relaxation leave allowance. Within core compensation, incentives can include foreign service premiums, hardship allowances, and mobility premiums. Fringe benefits include standard benefits like health insurance and paid time off as well as enhanced benefits for expatriates like relocation assistance and education reimbursement. The document also outlines three methods for setting expatriate base pay.
The document discusses the components of international compensation packages. It identifies three core sections: 1) core compensation including base pay and incentives like foreign service premiums and hardship allowances, 2) fringe benefits such as health insurance and relocation assistance, and 3) rest and relaxation leave allowance. Within core compensation, incentives can include foreign service premiums, hardship allowances, and mobility premiums. Fringe benefits include standard benefits like health insurance and paid time off as well as enhanced benefits for expatriates like relocation assistance and education reimbursement. The document also outlines three methods for setting expatriate base pay.
The document discusses the components of international compensation packages. It identifies three core sections: 1) core compensation including base pay and incentives like foreign service premiums and hardship allowances, 2) fringe benefits such as health insurance and relocation assistance, and 3) rest and relaxation leave allowance. Within core compensation, incentives can include foreign service premiums, hardship allowances, and mobility premiums. Fringe benefits include standard benefits like health insurance and paid time off as well as enhanced benefits for expatriates like relocation assistance and education reimbursement. The document also outlines three methods for setting expatriate base pay.
The document discusses the components of international compensation packages. It identifies three core sections: 1) core compensation including base pay and incentives like foreign service premiums and hardship allowances, 2) fringe benefits such as health insurance and relocation assistance, and 3) rest and relaxation leave allowance. Within core compensation, incentives can include foreign service premiums, hardship allowances, and mobility premiums. Fringe benefits include standard benefits like health insurance and paid time off as well as enhanced benefits for expatriates like relocation assistance and education reimbursement. The document also outlines three methods for setting expatriate base pay.
Compensation Management Md. Hasan Talukdar Lecturer (Part-Time) Department of Business Administration International Compensation Components of International Compensation: The basic structure of international compensation program is similar to the structure of domestic compensation programs. The main components include base pay and fringe compensation. The inclusion of nonperformance-based incentives and allowances distinguishes international compensation packages from domestic compensation packages. These can be divided to 3 main section and some other sub-sections. They are- 1. Core Compensation i. Base Pay ii. Incentive Compensation a) Foreign Service Premium b) Hardship Allowances c) Mobility Premium 2. Fringe Compensation i. Standard Benefits a) Protection Programs b) Paid Time-off ii. Enhanced Benefits a) Relocation Assistance b) Educational Reimbursement for Expatriates’ Children c) Home Leave and Travel Reimbursement
3. Rest and Relaxation Leave Allowance
Those components described in below.
Core Compensation: Core Compensation is a systematic approach to providing monetary
value to employees in exchange for work performed. It can be divided two types-
Base Pay: Base pay is the initial salary paid to an employee, not including benefits, bonuses, or raises. It is the rate of compensating an employee receives in exchange for services. Incentive Compensation: Incentive compensation is a form of variable compensation in which a salesperson’s or other employee’s earnings are directly tied to the amount of product they sell, the success of their team, or the success of the organization as a whole. These incentives can be again sub-divided into three types, They are-
Foreign Service Premium: Foreign Service Premiums are monetary payments above and beyond regular base pay. Company offer foreign service premiums to encourage employees to accept expatriate assignments. Hardship Allowances: The Hardship Allowance compensates expatriates for their sacrifices while on assignment. Specially, these allowances are designed to recognize exceptionally hard living and working conditions at foreign locations. Mobility Premium: Mobility Premium reward employees for moving from one assignment to another. Companies use these premiums to encourage employees to accept leave, or change assignment-usually between foreign posts or between a domestic position to one in a foreign country.
Fringe Compensation: Fringe benefits are forms of compensation a company provide to
employees outside of a stated wage or salary. Common examples of fringe benefits include medical and dental insurance, use of a company car, housing allowance, educational assistance, vacation pay, sick pay, meals and employee discounts. It can be divided two types-
Standard Benefits: Protection Program and Paid Time-off are the most pertinent standard benefits. Protection Programs: The following benefits provide employees with a source of income should they become disabled and unable to perform normal duties at work. Paid Time-off: Standard Paid Time-off benefits include annual vacation, holidays, and emergency leave. Enhanced Benefits: Enhanced Benefits are benefits offered by a company, the employer, through the workplace where employees can choose to buy them in addition to your current benefit offering. Relocation Assistance: Relocation assistance refers to a business benefit where a company offers an employee help in moving to a new city or state in order to work for that company. This can include reimbursement for any moving costs, temporary lodging and travel expenses. Educational Reimbursement for Expatriates’ Children: For education allowance, expat executives are given a maximum value per child up to a certain age, typically 18. Home Leave and Travel Reimbursement: Provided by the company to its expat executive to settle down into new places and to perform on behalf of the company. Methods of Setting Base pay: US companies use one of three methods to calculate expatriates’ base pay ❖ Home Country-Base Method: The Home Country-Based Pay method compensates expatriates the amount they would receive if they were performing similar work in the US. ❖ Host Country-Based Method: The Host Country-Based Method compensates expatriates based on the host countries’ pay scales. Companies use various standards for determining base pay, including market pricing, job evaluation techniques, and jobholders’ past relevant work experience. ❖ Headquarters Based Method: The Headquarters Based Method compensates all employees according to the pay scales use at the headquarters. They compromise purchasing power, currency stabilization and inflation to create this compensation program.
