There are many significant challenges that face multinational organizations in today’s business world. One such challenge, for global organizations and the human resource department, is effectively managing employee compensation and benefits packages. Managing compensation structures has become an integral part of many organizations that conduct operations in the global market, as there are many considerations for the host country when sending expatriates abroad. It is imperative for organizations to develop global compensation structures that attract and retain quality employees while not impeding operations or diminishing the profits of the organization. This paper will discuss the challenges of global compensation structures for multinational organizations and highlight some issues that arise from maintaining a global employee presence. In addition, this paper will discuss adherence, or lack of, to various United States compensation practices and policies and other general best practices that are recognized globally.
The Expatriate Compensation
The first step for a multinational organization’s human resource department is to develop a global compensation structure that understands the “political, social, legal, and cultural differences” (Haile & Williams, 2011, p. 25) of the countries in which they operate. It is not only essential to have factual knowledge of the local nation’s compensation and benefits best business practices but ensuring that all involved have cultural sensitivity is oftentimes difficult when structuring global compensation packages.
The goal of a global compensation structure is to ensure that the organization attracts and retains high quality employees that are interested in overseas assignments and wi...
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...g the employer out of employment law? Accountability for wage and hour violations in an age of enterprise disaggregation. Employee Rights and Employment Policy Journal, 15201.
Haile, S., & Williams, D. (2011). Factors that influence expatriate compensation problems. Academy Of Business Research Journal, 125-32.
Kistenbroker, H. V. (2012). Implementing Article 32 of The Convention on the Rights if the Child as a domestic statute: Protecting children from abusive labor practices. Case Western Reserve Journal of International Law, 44921.
Shelton, T. (2008). Global compensation strategies: Managing and administering split pay for an expatriate workforce: Multinational companies need an effective and efficient solution to manage, track and calculate complex split-pay compensation arrangements. Compensation and Benefits Review, 40(1), p. 56-60. doi:10.1177/0886368707312219
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