Evaluate the following methods for establishing base pay in international assignments: home country-based pay, headquarters-based pay, and host country-based pay. Include within your discussion

Evaluate the following methods for establishing base pay in international assignments: home country-based pay, headquarters-based pay, and host country-based pay. Include within your discussion the strengths and weaknesses of each method and factors that should be considered when determining the appropriate international pay strategy. How should organizations balance host-country income tax differentials? How do compensation plans affect employees’ willingness to accept foreign assignments?

• Home country-based pay method- This method will salary the expatriates similar as if they were working in the United States. Employees job evaluations are utilized to ensure that both positions are comparable. This method of pay works out well for the expatriate worker because their job is ordinarily short-term. The negative side to this method is when the expatriates’ home country-based salary is larger than what the local people are salaried for doing similar work (Martocchio, 2011, p. 342).

• Headquarters-based method- This method salaries all employees similar salary scales that is utilized at headquarters. This method is utilized for expatriates that are employed in one country for a while then relocate to another. This method makes it easier to salary the employees by the standard of one country regardless of where they are employed (Martocchio,2011, p. 342)

• Host country- based method- This method salaries the expatriates similar salary as local workers. This method of salary is usually utilized when the expatriates will be a long-term worker at a location. This benefits an organization when the cost of living is lower in that area. The similar situation can be a problem if the cost of living were higher than normal (Martocchio, 2011, p. 342).

The host-country organization should should choose between two choices for tax protection regarding expatriates. The two choices are tax protection and tax equalization for these traveling workers. For these two methods employers utilizes a theoretical tax allocated on the taxes that would be salaried if they worked in the United States. When utilizing the tax protection method the employer will compensate the employee back for an income tax that presents itself above the theoretical tax that was estimated. When utilizing the tax equalization the employer estimates the theoretical tax exhausted these taxes for the year. The employer salaries the taxes that are owed to both foreign and domestic that excel retained from their salary (Martocchio, 2011, p. 352).

Every culture works to try and earn enough money to provide for their family. The compensation plans offered to employees for emigrant is very satisfactory due to all of the extras that is offered. This is sometimes deceiving because they assume they will receive all the extra money but find out it takes that leftover money to survive. Then there is the situation of being absent away from family. If the job is not for at least 6 months then they are absent away from home until the job has been effectively completed. If it is more than 6 months they will receive time off to visit family (Martocchio, 2011).

When I was working at Walmart the manager had to go to India for a year to set-up a new super center. The company reimbursed him for all his expenses, his passport and shot, then all his created expenses while he was fulfilling the goals and objectives to the set-up. He was salaried his normal pay, in addition, to the agreed incentive amount, which was not made public. Then the following year we had a woman to go to the store located in Africa to teach employees there how to utilize Walmart’s technology system and she was gone for 5 months. Both of these United States employees receive time off to go visit their families twice every 3 months as were their families were allowed to visit them in Africa and India and the company paid all of the families’ expenses.

Reference

Martocchio, J. J. (2011). Strategic Compensation: A human resource management approach

(6th ed.). Upper Saddle River, NJ. Prentice Hall

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