Headquarters Based Methods
In headquarter based approach; the basic salary of expatriates is comparable to the base salary of the employees located at the headquarters of the company. This method is used to boost the morale of the expatriates to continue working on their international duties. The citizenship of the employee and the location do not dictate the compensation that an expatriate get. This method may affect expatriates when the cost of living
in the working countries is higher. Inflation and value of dollar vary across the countries this also tend to be a factor which affect headquarter method.
In modern day's incentive are widely used to boost individual's ability to continue working. Remunerative incentive can be the best used in this approach of headquarter based. This form of incentive exist when an
individual expect something due to working on a particular way (Kelly, 2014). The workers should have more incentive than those working in the main headquarters. To ensure the degree of uniformity corresponds to other
workers in the headquarters the incentives paid out to these expatriates should be relatively higher. The workers however should expect increase or decrease in incentives in case the revenues of the mother employer
decreases or increases.
Extrinsic incentive compensation would complement the headquarters approach. The management should from time to time determine which form of compensation to offer to the expatriates. This would make the workers work
more in order to be rewarded more according to the work performed (Salter, 2009). The expatriate who has good records get job promotion and bigger allowances. The incentives provided also will be complementing the business and personal risks. This reduces so much expenditure being used in compensation when the company is receiving low incomes. This method also promotes an interdivisional relationship within cooperation as no biased formula is used to favour any party.
References
Salter, M (2009) Tailor Incentive Compensation To Strategy Journal: Harvard Business Review: New York America
Kelly, D (2014) The Book on Incentive Compensation Management. ( 1st ed) London …
