Global HRM Final Exam Questions & Answers

International/Global Renumeration - ANSWERSDeals with the complex Compensation & Benefits structure of the MNE in various locations/subsidiaries around the world Global Renumeration: Overall C&B Philosphy - ANSWERSA common set of principles on which the organization bases its reward system (i.e.: standardization vs. localization, lead, lag or be at the market equivalency compared with rivals in the industry) Global Renumeration: External Constraints - ANSWERSConsideration of the external constraints placed by the various countries in which the MNE operates (i.e., cultural and national practices, laws, and tax systems) International Assignment Compensation - ANSWERSDeals with compensation and benefits of globally mobile employees—as short-term international assignees or long-term expatriates Objectives of MNE's Global Compensation and Benefits Programs - ANSWERS(1). Attraction and retention of the best qualified talent to staff the MNE, in all of its locations (2). Attraction and retention of employees who are qualified for international assignments (3). Facilitation of transfers between the various employment locations within the MNE (4). Establishment of a consistent relationship between the compensation of employees at home and abroad. (5). Compensation that is reasonable in relation to the practices of competitors yet minimizes costs International Renumeration Challenges - ANSWERS1. Comparability 2. Cultural Values for Rewards 3. Salary-Benefit Ratios 4. Tax laws differ tremendously across nations International Renumeration Challenges: Comparability - ANSWERSDetermining peer equivalencies for jobs in the various countries and subsidiaries International Renumeration Challenges: Cultural Rewards for Values - ANSWERSMeasure how people perceive the value of various rewards available in the compensation system (i.e., Acceptability of compensation based on performance-driven versus entitlement-oriented attitudes, variable vs. fixed pay) International Renumeration Challenges: Salary-Benefit Ratios - ANSWERSThe balance of salary versus benefits costs differs by country as a result of cultural practices, labor relations, and local laws and regulations International Renumeration Challenges: Tax Law Differentiation - ANSWERSAffects how employees income and benefits are taxed and how organizations pay their corporate taxes and expense deductions International Renumeration Challenges: Sunshine Rules - ANSWERSWhether or not employees salary information is confidential or disclosed is dictated by local cultural practice and law and how it is expressed (i.e., net or Gross amount) International Renumeration Challenges: Labor Relations and Employee Relations - ANSWERSLabor unions influence job security, compensation, benefits an entitlements and differ by country International Renumeration Challenges: National Laws and Regulations - ANSWERSMinimum wage, overtime, compulsory bonus and other entitlements, severance payments, contract requirements, and taxation of employee income International Renumeration Challenges: Global Law of Economics - ANSWERSWork, with regard to staffing, needs to be located where the quality and cost of the production of goods and services are optimized International Renumeration Challenges: Government Mandated Benefits - ANSWERSPaid time off, social welfare benefits (healthcare and retirement), various leave requirements that vary by country International Renumeration Challenges: Equality vs. Comparability - ANSWERSA more developed internalization stage, makes it harder to achieve consistency due to various cultural practices, legal and tax regulations (i.e., Are comparable employees in different parts of the organization treated equitably or fairly?) Global Compensation and Benefit Challenges: International Compensation - ANSWERSA number of different options (for establishing a international compensation system) have been used by various MNEs Global Compensation and Benefit Challenges: Headquarters Scale - ANSWERSWorldwide salary levels are established at Headquarters with differentials for each subsidiary according to their differing costs of living (i.e. managerial positions) Global Compensation and Benefit Challenges: Local Scale - ANSWERSEmployees are paid based on a local scale and utilized for the broader employee base Global Compensation and Benefit Challenges: Global Scale - ANSWERSPay for equal work on a global basis. Approach tends to be reserved for employees above a particular job or salary classification (nurses, designers, etc.) Global Compensation and Benefit Challenges: Local and International Compensation - ANSWERSHighest positions are paid based on an international standards (Headquarters) and lower positions are paid based on local standards Local Scale - ANSWERSA multinational enterprise has decided to pay its employees based on the local standards of each of its affiliated subsidiary. This is an example of ___________ approach. Global Benefit Packages - ANSWERS1. International Benefits 2. Healthcare 3. Insurance 4. Pension Plans 5. Flexible Benefits 6. Equity Compensation Equity Compensation: Employee Stock Ownership Plans (ESOPs) - ANSWERSProvide employees shares of company stock (bonus or profit sharing). Equity Compensation: Employee Stock Purchase Plans - ANSWERSOpportunity to buy stock during a period (payroll deduction or discounted) Equity Compensation: Stock Option Plans - ANSWERSRight to purchase stock in the future at current price Equity Compensation: Stock Appreciation Rights - ANSWERSReceive stocks only if the stock price appreciates Equity Compensation: Phantom Stocks - ANSWERSSimulated equity plan, value corresponds to price fluctuations (employee then is paid in cash) Stock Appreciation Rights - ANSWERS____________ is an equity compensation plan where MNEs provide stocks in the future only when the stock price increases. Employee Benefits: Core Benefits - ANSWERSBasic benefits available to all employees Employee Benefits: Required Benefits - ANSWERSRequired by local law Employee Benefits: Recommended Benefits - ANSWERSLess essential, available when affordable Employee Benefits: Optional Benefits - ANSWERSNonessential, make available when competitors are offering it