Strategic Compensation:“Compensation is the package of quantifiable rewards an employee receives for his or her labor.” (Gomez, 2002, p. 324) Strategic compensation is a compensation scheme put forth by an organization and approved by the board of the organization to enhance motivation of the organizations ’employees.
Identification of the appropriate compensation approach would be the first issue to address. That is the whether to use “home country approach, where the employee’s salary is based on the salary structure of the Country employees are assigned to. The “host country approach,” which puts employee’s salary the same as to the salary the locals of the countries assigned to is paid. The “global” compensation approach, through which the company put it’s all employees on the same salary sale just as of home country employees are paid.
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I would work on a frame work that Respect Local Cultural, Competitive and Operational Issues to; ensure employee’s assignment is connected with the company’s strategy, meet the needs of the company and increase talent pool in the selection of international assignment of employees of balance sheet method to manage international compensation. Ensure that policies are centrally managed and locally administered. Internationalization inflict a movement in the course of standardization of pay, operational conditions and administration systems in Human resource, the influence of local culture, institutional planning and job market practices. (Plessis and Huntley, 2009)
Gomez-Mejia, L., & Balkin, D. (1992). The determinants of faculty pay: An agency theory perspective. Academy of Management Journal, 35, 921–955.
Du Plessis, A.J. (2009). An overview of the influence of globalization and internationalization on domestic Human Resource Management in New Zealand. International Review of Business Research paper 5(2)
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