Global Human Resource
Management
Compensation
It means the
remuneration which an
employer pays to the
employee in return of
their services and
contributions to the
company.
It includes salary,
allowances, fringe
benefits, bonus, profit
sharing and employee
benefits.
Compensation for Global
Employees
• Salary
Home Country • Income Tax benefits
• Housing
Salary • Reserves
• Salary
Host Country • Income Tax benefits
Cost •
•
Housing
Reserves
• Purchasing Power Premiums
Host Country • Incentives
Equivalent •
•
Allowances
Gratuity
Compensation management includes two
issues:
◦ National economic differences
◦ Payment practices
There are significant differences in the
compensation levels and structures among
different countries
This is because, MNCs pay the executives of
various countries based on the local
compensation levels.
Example of Components
All the MNCs do not include all the components listed
hereunder. The following list is an illustrative one rather
than an exhaustive or inclusive one.
Pay or Base Salary
Cost of living Allowance
Educational Allowance
International Market Allowance
Insurance Allowance
Medical Allowance
Relocation Allowance
Hardship & Danger Allowance
Settling-in and Settling-out Allowance
Bonus
Gratuity
Pension
Benefits
Approaches to International
Compensation
Going Rate Balance Sheet
Approach Approach
Here salary of Expatriate Here salary is linked to
is linked to the salary the salary structure of the
structure in host country relevant home country.
(local Market Rate). Ex- a UK based executive
If the location is in a local taking up assignment in
pay MNCs ususally India would be paid UK
supplements base pay base salary rather than
salary level of India
with additional benefits.
Performance Appraisal
It is a method of evaluating
employee behaviour relating to
expected work and behaviour,
normally including both the
quantitative and qualitative
aspects of job performance.
Several methods are used to
evaluate job performance of
employees.
It is very difficult in case of an
expatriate because of
multifarious experience of an
MNC.
360 performance Appraisal
It refers to the appraisal
of an employee by all the
concerned person or
parties.
In this method generally
appraisers are:
Supervisors/ Superiors
Peers
Subordinate
Consultants
Customers
Users of Services
It is a system or process in which employees receive
confidential, anonymous feedback from the people who
work around them. This typically includes the
employee's manager, peers, and direct reports. A
mixture of about eight to twelve people fill out an
anonymous feedback form that asks questions covering
a broad range of workplace competencies. The feedback
forms include questions that are measured on a rating
scale and also ask raters to provide written comments.
The person receiving feedback also fills out a self-rating
survey that includes the same survey questions that
others receive in their forms
Examples of the questions asked in
360 degree performance appraisal
Have you experienced any problems with him
interpersonally?
Does the employee effectively solve problems?
Does the employee appear to be motivated by his work-
related tasks, job, and relationships?
Are the employee’s work methods and approached to
accomplishing his job effective, efficient, and continuously
improving?
Are there areas of improvement that you would recommend
for this employee that would help him accomplish his work
more effectively?
Does this employee exhibit leadership qualities in the roles
he plays in the company?
Modern Performance Appraisal
Method
Behaviorally anchored Rating Scales
Assessment Centers
Human Resource Accounting
Management by Objectives
Psychological Appraisal
Measures for Performance
Appraisal of Expatriates
These are the suggested measures to improve
the performance appraisal of expatriates:
1) Stipulate the difficulty level involved in assignment at the
expatriate’s workplace. Ex- For an employee working in China
is considered more difficult than working in UK.
2) Give more weight in evaluation towards the on site managers.
3) Qualitative criteria should be included
4) Due weight should be given to the adaptability of new culture
5) Due weight should be given to self appraisal
