{"id":93604,"date":"2022-09-06T05:00:46","date_gmt":"2022-09-06T05:00:46","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/companies-can-take-one-of-four-approaches-to-compensation-which-do\/"},"modified":"2022-09-06T05:00:46","modified_gmt":"2022-09-06T05:00:46","slug":"companies-can-take-one-of-four-approaches-to-compensation-which-do","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/companies-can-take-one-of-four-approaches-to-compensation-which-do\/","title":{"rendered":"Companies can take one of four approaches to compensation. which do"},"content":{"rendered":"<div>\n<p>\u00a0<\/p>\n<p><strong>Companies can take one of four approaches to compensation. Which do you think is the best approach? Why?<\/strong><\/p>\n<p><strong>Frame your post as an argument.<\/strong><\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/learn.umgc.edu\/d2l\/common\/dialogs\/quickLink\/quickLink.d2l?ou=625825&amp;type=content&amp;rcode=UMUC-4934828\"><strong>Learn to support your arguments<\/strong><\/a><\/p>\n<ul>\n<li><strong>The home-country-based approach.\u00a0The objective of a home-based compensation program is to equalize the employee to a standard of living enjoyed in his or her home country. The 2016 Cartus Global Mobility Policy &amp; Practices Survey\u00a0found that 76 percent of long-term assignments and 75 percent of short-term assignments use a home country pay structure.1\u00a0Under this system, the employee&#8217;s base salary is broken down into four general categories: taxes, housing, goods and services, and discretionary income.<\/strong><\/li>\n<li><strong>The host-country-based approach.\u00a0With this approach, the expatriate employee&#8217;s compensation is based on local national rates. Many companies continue to cover the employee in its defined contribution or defined benefit pension schemes and provide housing allowances. Only 14 percent of long-term assignments and 5 percent of short-term assignments base pay on local rates, according to the Cartus survey.2<\/strong><\/li>\n<li><strong>The headquarters-based approach.\u00a0This approach assumes that all assignees, regardless of location, are in one country (i.e., a U.S. company pays all assignees a U.S.-based salary, regardless of geography). Cartus found that a small percentage of companies use headquarters-based approaches for long-term assignments (4 percent) and short-term assignments (5 percent).3<\/strong><\/li>\n<li><strong>Balance sheet approach.\u00a0In this scenario, the compensation is calculated using the home-country-based approach with all allowances, deductions and reimbursements. After the net salary has been determined, it is then converted to the host country&#8217;s currency. Since one of the primary goals of an international compensation management program is to maintain the expatriate&#8217;s current standard of living, developing an equitable and functional compensation plan that combines balance and flexibility is extremely challenging for multinational companies. To this end, many companies adopt a balance sheet approach. This approach guarantees that employees in international assignments maintain the same standard of living they enjoyed in their home country.\u00a0A worksheet lists the costs of major expenses in the home and host countries, and any differences are used to increase or decrease the compensation to keep it in balance.<\/strong><\/li>\n<li><em><strong>Source:<\/strong><\/em> <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shrm.org\/resourcesandtools\/tools-and-samples\/toolkits\/pages\/designingglobalcompensation.aspx\"><strong>https:\/\/www.shrm.org\/resourcesandtools\/tools-and-samples\/toolkits\/pages\/designingglobalcompensation.aspx\u00a0<\/strong><\/a><strong>(Note that this source requires a paid subscription to SHRM to view the full article.)<\/strong><\/li>\n<\/ul>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 Companies can take one of four approaches to compensation. Which do you think is the best approach? Why? Frame your post as an argument. Learn to support your arguments The home-country-based approach.\u00a0The objective of a home-based compensation program is to equalize the employee to a standard of living enjoyed in his or her home [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-93604","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/93604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=93604"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/93604\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=93604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=93604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=93604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}