Question

If you were a HCN (Host Country National) employed by a multinational corporation, do you think pay should be equal between HCNs and expatriates in equivalent positions? If you were president of your subsidiary in a host country, as a PCN (Parent Country National) your pay is five times higher than the pay for the highest paid HCN (your vice president). What do you think now? in 200 word

Answer 1

If I was the HCN, I would naturally feel a desire to achieve more pay; however, I do not believe I would begrudge the PCN due to the fundamental understanding of the differences

Remuneration is the measure of pay which a representative gets for the administrations that are rendered. Expatriates are the ones who go to foreign subsidiaries to serve the organization. Compensation plays a vital role in motivation and performance of expatriates. Thus, it is necessary that they should be compensated fairly. Organizations for the most part take after two sorts of ways to deal with choose their pay viz. going rate and balance sheet approach.

Going rate approach is the one under which the expatriate is paid according to the pay of other employees for the comparable position. Balance sheet approach is the one under which the company pays the salary of home country plus a financial inducement to compensate for the cost of living and hardship allowance if any. Being a HCN employee, I would prefer the equality in the pay of expatriates and HCNs in equivalent positions as equality creates better coordination and effective performance. However, the pay will depend upon the approach which organization follows.

Being a PCN and the President of associations' backup, if my pay is five times higher than the most generously compensated HCN i.e. VP of the association, I would prefer that there should not be much disparity in the pay structure. This de-motivates the one with lower paid HCNs. However, a little variation in compensation because of the position and variation in cost of living will be acceptable.