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International Hr

In: Business and Management

Submitted By ship
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Pages 11
International Human Resource Management:

Chapter – 6:


Introduction: One of the key components of IHRM is the compensation administration in MNCs. Today, compensation and employee benefits contribute to 40-50% of the total costs. Compensation is strategically reported and monitored at the broad – levels and with the investors to assess the health of the organization. What is compensation management? Effective and efficient process of managing the earnings – financial and non financial rewards of the employees in an organization based on their performance towards organizational goal is called compensation management. International Compensation is an internal rate of return (monetary or non monetary rewards / package) including base salary, benefits, perquisites and long term & short term incentives that valued by employee’s in accordance with their relative contributions to performance towards achieving the desired goal of an organization. It influences: • • • Organizational culture Recruitment and selection of competent employees Motivation and performance

Objectives of compensation:
Compensation decisions are strategic decisions and play a key role in achieving performance and sustainable competitive advantages for national as well as international firms. Therefore the key objectives are: • • • • • Attract employees who are qualified , experienced and interested in international assignments. Facilitate the movement of expatriate’s from one subsidiary to another, from home to subsidiary, and back from subsidiary to home. Provide a consistent and reasonable relationship between the pay levels of employees at headquarters, domestic affiliates and foreign subsidiaries. Be cost effective by reducing unnecessary expenses. Should be easily understood and easy to administer.

Components of Compensation: components of international…...

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