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ASSIGNMENT :

IMHR DILEMMA: WHOM DO YOU SATISFY? EXPATRIATE OR NATIONALS

Hi-Tech Electronics Limited was established in 2006 in Kuala Lumpur, Malaysia. It produces and markets all types of electronics goods in most of the Asian and Pacific countries. It has been one among the top five companies as for the level of technology and one among the top three companies regarding marketing of the products in Malaysia. The company’s policy and practices concerning human resource management are top in the country. The company’s salary administration policies and practices were taken as guidelines not only by the other companies but also by various wage boards and pay commissions in the country. But this company has been struggling a lot because of a minor problem relating to administration of salary and benefits. The problem is stated hereunder.

The company employed nearly 400 national young graduate and post graduate engineers and 20 expatriate engineers. This employee forms the cream of the company’s present human resource. The expatriate employees occupied higher position in all the departments including Human Resource Department. The company’s salary policy and benefit policy were formulated mainly on the basis of the expatriate employee’s desire. The base salary of the company is the same for both the expatriate and national employees. But expatriate receive additional allowances like international market allowance, educational allowance, settling-in allowance, car allowance, housing allowance and entertainment allowance. Thus, expatriate receives nearly 250% more salary than the nationals doing the same job.

The national employees demanded the management to pay equally with that of expatriates immediately. According to them, the pocket frustrates them severely.

QUESTIONS:

1. Identify the crucial issue in this case.

2. From your opinion what are the 3 factors that enables expatriate receives more salary than the nationals who are doing the same job? Explain and justify your statements.

Answer 1

Question 1:

The crucial issue in the case is that the national employees demanded equal pay for both the expatriate and national employees. The expatriate employees receive nearly 250 percent more salaries than the national employees for doing the same job. It happens mainly because of the additional allowances that the expatriate employees are receiving. Though the base salary is the same for both the expatriate and national employees, there is a resentment among the national employees regarding the net remuneration that they receive. The national employees feel that that the salary is decided solely on the basis of the interests of the expatriate employees. Further, the fact that the Human Resources Department which is administering the salary is headed by expatriate employees also might have provoked national employees.

Question 2:

The following are the factors that enable expatriate employees to receive more salary than the national employees for doing the same job.

1. Expatriate employees occupied a higher position in all the departments of the organization so they are eligible for higher remuneration.
2. The cost of living of expatriate employees might be much higher compared to national employees so they are eligible for a higher salary than the national employees.
3. Expatriate employees would have many disadvantages compared to the national employees including relocation expenses so they are eligible for higher remuneration.

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