ABSTRACT
Understanding how to develop and optimize the design of total compensation and reward within global organizations is a much sought-after skill in the arena of HRM, as it is a complicated issue. The first issue is that of ‘Staffing’ the international organizations operating overseas in any one or more than one of the three methods, viz., (i) Home-country or parent-country nationals (PCNs/expatriates), (ii) Host-country nationals (HCNs) and (iii) Third-country nationals (TCNs). All three types have been explained in detail. Then the four types of international organizations, viz., international corporations, multinational corporations (MNCs), global corporations (GCs), and transnational corporations (TNCs), have been explained. Thereafter, follows the discussion on the aims and objectives and a brief note on factors of international remuneration and then a discussion on factors affecting the design of international remuneration. Approaches to international remuneration also find a space in a brief discussion followed by a lengthy discussion on expatriate compensation which deals with the concept and definition, constituents, like base pay, variable pay, bonuses, allowances, etc., of compensation of expatriates. The issue of payment of taxes by expatriates on their compensation, like tax, protection, tax equalization, net payments, purchasing power of money, fringe benefits, pay for time not worked, etc., has also been discussed. Approaches to determine an expatriate's pay, like the balance sheet approach, flexible compensation approach, localization approach, and lump summing approach, have been discussed. Then, the TCNs’ compensation has been undertaken and discussed at length. Thereafter, the issue of compensation determination during various stages of growth of a company finally becoming a global company has been discussed. Finally, LCNs’ pay has been discussed. The chapter comes to an end after writing the chapter review, discussion questions, individual and group activities and case study.
