International compensation
3 important questions on International compensation
What are the key components of a compensation program for expatriates?
- base salary
- foreign service inducement and hardship premium - compensate for challenging locations
- allowances
- benefits - health care, pension, life insurance
What are the six common allowances?
- cost-of-living allowance - family size is important
- housing allowance - maintain home country living standards
- home leave allowance - trips back home
- education allowance
- relocation allowance - moving and shipping
- spouse assistance
What are the three approaches to international compensation of expatriates?
- the going rate approach - salary structure in host country
- the balance sheet approach - base salery is maintained (fixed)
- (local plus approach - reduced package)
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