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Human Resources Management like managing compensation on a global basis remains tricky as a company's remuneration scale varies according to new market. It becomes more challenging when attempting to create consistent and fair reward practices in multiple countries. Many hr strategic plan from organizations assign employees abroad to set up business or work in the host country. In cases where foreign assignments exceed six months, the employer offers employees an expatriate reward package.
The employer must define the expatriate package clearly and make sure that financial conditions are fair and consistent, and that the salary package must ensure employee retention.
How to calculate an expatriate remuneration package? Many companies use the balance sheet approach. It provides employees with a package that equalizes the cost differences between the overseas assignment and the same assignment in the home country. It is based on some key factors, which are based on cost of living index and a comparison between a home country and a host country's living expenses.
The remuneration of the home country should be comparable to the income overseas. The job family and position must be similar to make comparisons. HR strategic plan, is that the package should be the best to retain employees.
The remuneration policy for expatriates is based on the circumstances of the overseas posting and the requirements of the company. Tax equalization, currency rates, social hazards, housing and education facilities are key issues that must be analyzed when designing a package.
There are difficulties in addressing the end-of-service benefits such as pension, gratuity and social insurance provision across the parent and posting country. There is also a need to assist employees in providing relocation benefits such as joining ticket, transit accommodation and transport.
Handy Hints on Human Resources Management
• The expat package must be fair and ensure employee retention
• Firms use the balance sheet approach to calculate packages
• Package is based on home and host country's living expenses
Source: Dr. Pon Mohaideen Pitchai, Special to Jobs & Careers
The writer is a Dubai-based HR and Management Consultant