Exam 10: Compensation for a Global Workforce

Although direct financial compensation for the same level of employees can differ dramatically from one country to another, the preferred forms of employee benefits tend to be fairly standard throughout the world.

The use of this expatriate compensation model may lead to repatriation problems for TCNs and inpatriates from lower-salary countries who find that a return to their home country salary structure means a significant decrease in pay.

The individual is becoming an increasing focus in performance-based pay, away from group- and organization-based rewards, and even despite traditional customs of collectivism in some countries.

Since HCN inpatriates and third-country nationals (TCNs) also represent forms of expatriates as employees assigned to work away from their home countries, they require little if any differing approaches to expatriate compensation from those presently used for traditional PCN expatriates.

The use of targeted performance-dependent or "at risk" pay is:

According to the Milkovich and Bloom model of global reward system design, the core set of compensation components involves the selection by employees themselves of elements of compensation that they perceive are of greatest value to their individual situations.

A coordinated, strategic approach to managing global compensation should be addressed at two levels: the strategic management of the compensation function itself and the

Individual performance-based pay in the form of bonuses or even less tangible benefits also can be a vital tool in retaining top talent and keeping employees engaged and focused during tough economic times.

The strategic management of global compensation should be coordinated and integrated with other company HR functions and practices to effectively carry out strategic objectives.

An employee's perceptions of the total set of rewards, incentives, and disincentives constituting his or her overall compensation and rewards picture are all that ultimately matters in motivating employee performance.

What are key factors that need to be considered in determining the compensations of expatriates? How different are these factors when MNCs are using hot county nationals (HCNs) or third country nationals (TCNs)?

The practice of __________ involves making at least part of an employee's compensation contingent on achieving individual, group, or organization work objectives.

Which of the following objectives should be part of an effective overall compensation strategy for managing a global workforce?

When planning for employee compensation, managers should consider, within a total reward system perspective, the entire spectrum of rewards, incentives, and disincentives, including financial and non-financial, formal and informal.

Compared to non-accumulating pay schemes, accumulating pay schemes in general are seen to produce a higher average level of employee performance at a lower cost to the organization.

Employee compensation focuses on motivating individual performance, not on organizational objectives like company-wide commitment and alignment.

Work flexibility to fit individual employee personal needs is increasingly recognized as one of the most commonly desired forms of workplace rewards for all levels of employees throughout the world.

It has been found that an increase in MNC-wide knowledge sharing is associated with global manager bonuses that are based on the MNC's overall performance.

The practice of "pay for performance" represents one of the most significant and rapidly growing trends in compensation practices at all employment levels across globally managed MNCs. Please explain the main characteristics of this approach. What do you think are the limitations of this approach?

National culture can have a significant impact on employee perceptions, preferences, and emotional reactions associated with employee compensation and rewards.