Compensation policy

Issue: International Compensation Policy

Description: Choosing and gratifying the finest global applicants can create all the change in the world in how suitably you participate on an international degree. But reasonably paying off human resources who perform in a broad selection of situations is complex. As stated by wage specialist Douglas P. Roeser, international compensation policy aims: “To draw, preserve and encourage premium ability; to be superficially aggressive; and to be internally reasonable.” (Overman, 1992) Also, international compensation policies aid the company to acquire competitive workers to oversee their branches abroad.

I.                   Standard Elements of International Compensation

A.    Base Salary

      – The predetermined, returning percentage of the worker’s wage (“Base Salary,”).

B.     Goods and Services Allowance

      – These are grants given to employees for them to be able to acquire the things that they need in the country where they are assigned to.

C.    Housing Allowance

      – These are payment given to workers because they were moved from one place to another, thus losing their current home.

D.    Tax Equalizations

      – These are intended to neither supply a worker with neither a tax benefit nor tax detriment from the overseas obligation. If joint real taxes are greater because of the foreign assignment, the company would repay the worker for the added costs acquired. Nevertheless, if pooled real taxes are lesser because of the foreign assignment, then the worker must repay the company for the diversity. In spite of the tax area where the worker operates, the worker will be subject to the equal quantity of taxes, net of compensation (or expense) from the company. (Yager, 1999)

E.     Premiums

      – Additional wage grants made to workers who operate on a place other than a regular day place, if the place is thought to characterize an adversity, or if competitive companies provide a similar premium. Place differentials usually are expressed as a percentage, depending on the assignment. (“Premiums,”)

F.     Benefits and Perquisites

      – Benefits are the positive repercussions, both through and circuitous, ensuing from some accomplishment. This consists of both monetary and non-financial information. Description of benefits, and costs, can differ depending on one’s perspective or plan. Such as, are “international compensation policies” an estimator of advantages and disadvantages? (“Benefits,”) On the other hand, perquisites are special benefits for instance a company car, expense account, office decor, etc. (“Perquisites,”)

G.    Relocation Allowance

– A relocation allowance is made accessible to recent staff members to lend a hand in the expense of the physical removal of themselves, their other half and reliant offspring from their last place of residence at the moment of employment to the company. (“Relocation Allowance,”)

II.                Non-Cash Incentives

– These are encouragements that are not a straightforward cash payment, such as comp time, a membership to a association, a reserved parking space, and even a relocation to a new work place are only a few. (ERI Economic Research Institute, 2007).


Base Salary [Electronic Version]. Retrieved May 4, 2007 from

Benefits [Electronic Version]. Retrieved May 4, 2007 from

ERI Economic Research Institute, I. (2007). Noncash Incentives [Electronic Version]. Retrieved May 4, 2007 from

Overman, S. (1992, July 1992). The right package – planning an international compensation policy – International Compensation. HR Magazine.

Perquisites [Electronic Version]. Retrieved May 4, 2007 from

Premiums [Electronic Version]. Retrieved May 4, 2007 from

Relocation Allowance [Electronic Version]. Retrieved May 4, 2007 from

Yager, J. M. (1999). Introduction to HR Tax Reimbursement Policies For Canada to U.S. Employee Relations [Electronic Version]. Retrieved May 4, 2007 from