Define and Describe the Balance-Sheet Approach Used by Many Multinational

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The Answer is The balance-sheet approach is a system designed to equalize the purchasing power of employees at comparable levels living overseas and in the home country,and to provide incentives to offset qualitative differences between assignment locations. The four elements of this approach are (1)base pay,which should be equal to the domestic pay for a comparable job; (2)differentials,a cost-of-living-type adjustment generally computed from U.S.Department of State data; (3)incentives,an adjustment often at about 15 percent of base pay,used to compensate the expatriate for separation from his or her family and friends; and (4)assistance programs,used to cover costs of moving and storage as well as car and education expenses.

Define and Describe the Balance-Sheet Approach Used by Many Multinational

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