Paraphrasing Different Perceptive Responses

1. Respond to Mecole Cooper
Hi! Azikiwe,
This is a very insightful post and I have learned a lot from your explanation of all the basic pay terminologies. Domestic employees are attracted with incentives, recognition awards, and perquisites, whereas international employees are attracted to profit sharing, stock options, and even bonuses. I believe the perquisites are reserved for the upper-level employees or management as they are expensive in all forms such as first-class travel. You are right to mention the host country and balance sheet approach and I believe the balance sheet approach is easier to implement as here the company would have to just match the standard of living between two countries.
2. Respond to Jessica's post -
Base pay is a compensation built around two process which are job evaluation and market benchmarking (Kavanagh, Thite & Johnson, 2015). Job evaluation is how value is placed upon factors like education. Market benchmarking determines the price needed to be paid for the job by collecting data from surveys or through a website.
Some incentives that companies use to attract domestic employees are pay raises and bonuses. They may even offer fully paid vacations and enticing gifts for their employees. For a company to determine the base pay of international employees they could take two approaches to doing so: going-rate and balance-sheet. The going-rate approach, also called the host-country approach, is the salary levels within the host country that are being given to employees (Kavanagh, Thite & Johnson, 2015). The balance-sheet approach is the home country standard of living plus a bonus for an employee relocating internationally. These approaches meet the objectives if international compensation policy because it is a fair assessment and data pull from home countries that offer similar salaries. Although the salaries may not be exactly the same they are comparable and employees may be more likely to relocate if they at least receive the salary there were making in the country they currently live in.
3. Respond to Serena
Companies must have a base pay that will pay fairly for the job but that will also attract the right talent pool. Base pay is developed around job evaluation and market benchmarking (Johnson, et al., 2015, sec 14.2, para. 3). Job evaluation allows for a hierarchy based on set factors such as education and experience. Benchmarking is used to assign pay rates. Surveys can be assigned to set a market benchmark for employees in the current position and what they are making. Employers need this to ensure that they are staying competitive in the market. Some companies offer incentive pay such as bonuses, incentives, profit-sharing, or stock options. Companies can also offer growth opportunities, recognition awards, and base rate raises. Paid maternity and paternity leave, paid time off, and tuition assistance is also forms of incentives that can attract top talent.
There are a couple of different approaches that can be used to develop a base pay structure for international employees. They can use the going rate/host country or the balance sheet approach. For the going rate/host country approach, the base pay structure is correlated to how the base pay is set up for the employees in the host country. Whereas the balance sheet approach is based on the home country’s standard of living but also allows financial incentives for the additional international obligations that have been placed on the employee (Johnson, et al., 2015, sec 15.1, para. 41).
Both going rate/host country and balance sheet are good ways to entice employees to join the company. Balance sheet compensation structure would probably be easier as it will allow the current country’s base rate to remain the same with an additional financial incentive or differential for the international assignment. The going rate/host country may be more complicated to use as it can be extremely complex as there are different pay scales and this can cause additional stress on the HR or compensation team. It can also be difficult to explain the complexities to the international employee as well.