Expat
ASA University Review, Vol. 6 No. 2, July–December, 2012
Compensation Issues Relating to Expatriate
Managers: A Review of Related Literature
Sheikh Abdur Rahim*
Abstract
The present study revealed the problems involved with the preparation of compensation package for the expatriate managers. The study also revealed the measures, which the managers of multinational companies throughout the world can help to reduce the problems while preparing the compensation package for the expatriate managers. Based on the secondary data, the paper argues that preparation of compensation package for the expatriate managers is very much difficult because of environment, nature of the assignment, skills, knowledge, competencies and so on between parent country and host country. The researcher also opens the scope for further research on test and describes the strategic flexibility model as to how MNCs are reacting to the complexities they face in dealing with international compensation.
Keywords: Compensation, Expatriate, Multinational, Allowance, Premium, Manager.
Introduction
For multinational firms, successful management of compensation and benefits requires knowledge of the employment and taxation laws, customs, environment, and employment practices of many foreign countries. Also needed are familiarity with currency fluctuations and the effect of inflation on compensation, and an understanding of why and when special allowances must be supplied and which allowances are necessary in what countries. All of these needs must be fulfilled within the context of shifting political, economic, and social conditions.
The level of local knowledge required in many of these areas requires specialized advice; many multinationals retain the services of consulting firms which may offer a broad range of services or provide highly specialized services relevant to HRM in a multinational context.
Because of their high-cost, HR managers spend a great deal of time
Compensation Issues Relating to Expatriate
Managers: A Review of Related Literature
Sheikh Abdur Rahim*
Abstract
The present study revealed the problems involved with the preparation of compensation package for the expatriate managers. The study also revealed the measures, which the managers of multinational companies throughout the world can help to reduce the problems while preparing the compensation package for the expatriate managers. Based on the secondary data, the paper argues that preparation of compensation package for the expatriate managers is very much difficult because of environment, nature of the assignment, skills, knowledge, competencies and so on between parent country and host country. The researcher also opens the scope for further research on test and describes the strategic flexibility model as to how MNCs are reacting to the complexities they face in dealing with international compensation.
Keywords: Compensation, Expatriate, Multinational, Allowance, Premium, Manager.
Introduction
For multinational firms, successful management of compensation and benefits requires knowledge of the employment and taxation laws, customs, environment, and employment practices of many foreign countries. Also needed are familiarity with currency fluctuations and the effect of inflation on compensation, and an understanding of why and when special allowances must be supplied and which allowances are necessary in what countries. All of these needs must be fulfilled within the context of shifting political, economic, and social conditions.
The level of local knowledge required in many of these areas requires specialized advice; many multinationals retain the services of consulting firms which may offer a broad range of services or provide highly specialized services relevant to HRM in a multinational context.
Because of their high-cost, HR managers spend a great deal of time
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