Discuss the Challenges Related to Compensating Employees from Other Countries

question 86

Essay

Discuss the challenges related to compensating employees from other countries.
Market pay structures can differ substantially across countries in terms of both pay level and the relative worth of jobs.One reason for such differences is a shortage of talent in local labor markets.Differences such as these create a dilemma for global companies: Should pay levels and differences reflect what workers are used to in their own countries? Or should they reflect the earnings of colleagues in the country of the facility,or earnings at the company headquarters? If the standard is that of the higher rates in the home country,the employees in the host country will likely see the expatriate's pay as unfair.If the standard is that of the lower pay in the host country,the company will likely find it impossible to persuade an expatriate to take an assignment in the host country.Dilemmas such as these make a global compensation strategy important as a way to show employees that the pay structure is designed to be fair and related to the value that employees bring to the organization.These decisions affect a company's costs and ability to compete.However,that conclusion oversimplifies the situation for many companies.Merely comparing wages ignores differences in education,skills,quality,and productivity.

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Definitions:

Carrying Amount

Carrying Amount is the value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, or impairment losses.

Accounts Receivable

Represents amounts due from customers for credit sales, expected to be received in the near future.

Managing

The process of planning, organizing, leading, and controlling resources to achieve organizational objectives efficiently and effectively.

Calendar-year

A one-year period starting on January 1 and ending on December 31, used as the fiscal year by many companies.