1. Global Total Compensation Compensation Management Prepared by: Mr. Zaheed Husein Mohammad Al-Din, Sr. Lecturer, BBS Adapted from: Compensation, Ninth Edition (By: George T. Milkovich, Jerry M. Newman)

2. Topics for Discussion Managing Variations Trade Unions and Employee Involvement Comparing Costs Strategic Market Mind-set Expatriate Pay

3. Managing Variations Factors that determine the Variations: Institutional Economic Employee Organizational

4. Institutional Culture/Politics Social Contract Trade Unions Employer Federations

5. Economic Competitive Market Dynamics Capital Flows/Ownership Taxes

6. Employee Demographics Knowledge/Skills Attitudes/Preferences

7. Organizational Autonomy Information Flows Technology Innovation Work Roles Strategic Intent

8. Trade Unions and Employee Involvement

9. Comparing Costs: Standard of Living Comparing Systems: The Total Pay Model. Basic Choices: Objectives of pay systems External Competitiveness Internal Alignment Employee Contributions Management National Systems: Comparative Mindset

10. Strategic Market Mind-Set Localizer: Think Global, Act Local Exporter: Headquarters Knows Best Globalizer: Think and Act Globally and Locally

11. Expatriate Pay Expatriates: People who are citizens of the employer’s base country Third-Country Nationals: People who are citizens of neither the employer’s base country nor the subsidiary’s country Local-Country Nationals: People who are citizens of the country in which the subsidiary is located

12. Why Expatriates are Selected? 1. Broaden International Perspectives 2. New Ventures 3. Train Locals 4. Specific Expertise 5. Protect Company Interest 6. Developmental Assignments 7. Technology or Skills Transfer 8. Management Development 9. Sales

13. Common Allowance in Expatriate Pay Packages (examples) Financial Allowances 1.Reimbursement for tax return preparation 2.Children’s Education Allowance 3.Housing Differential 4.Household Furnishing Allowance 5.Hardship Premium Family Support 1.Language Training 2.Assistance Locating Schools for Children 3.Training for Local Culture’s Customs (family) 4.Child Care Providers 5.Assistance Locating Spousal Employment

14. Common Allowance in Expatriate Pay Packages Social Adjustment Assistance 1.Emergency Leave 2.Home Leave 3.Company Car Driver 4.Assistance with Locating New Home 5.Access to Health Care

15. Balance Sheet Approach Premise: Employees on overseas assignments should have the same spending power as they would in their home country The home country is the standard for all purposes. The objective is to: 1. Ensure mobility of people to global assignments as cost-effectively as feasible 2. Ensure that expatriates neither gain nor lose financially 3. Minimize adjustments required of expatriates and their dependents

16. End of Topic