4. Issues in Compensation in International HRM
The right type of compensation is even more important for employee motivation in
International HRM because the risks and challenges in performing are higher. Mostly
the MNC’s rely on balance sheet approach in deciding pay and benefits .It can be
implemented by home based method, headquarter based method or host based method.
The companies must compensate for cost of living in the host country, Foreign Service
Managing Human Resources in International Organizations 359
premium, healthcare costs, educational allowance for children and housing assistance
in host country. The company must consider the burden of dual taxation and other
taxes like excise customs.