Human resource management involves a strategic approach to managing a company’s workforce to ensure they help increase the organization’s value and competitive advantage. Compensation and reward are one of the functions of human resource management. The HR team needs to strategically determine the approach of compensating and rewarding workforce. Effective compensation and reward approach are evident as it increases motivation and productivity of the workforce . The balance sheet approach is a compensation method that combines region-based pay and allowances based on the country’s conditions.
Advantages of the Balance Sheet Approach
The balance sheet approach ensures that employees are paid the same way they would if they were at home. This approach makes the transition into a new country for work easier because they are compensated for such worries. This approach is a considerate payment method in that the employee’s welfare is taken seriously. The company is more considerate of the change to the employee and not an increase in labor cost.
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Employees get additional allowances based on region - this can act as a motivating factor for the employee. The company benefits because a motivated workforce will improve the company’s value and competitive advantage. The balance sheet approach also motivates employees to take jobs outside their home country hence enhancing mobility. The company also benefits from the mobility of the employees to other branches in other regions.
Mobility allows growth in talent in different operating regions of the company. It is motivating for an employee to take a job in a different country if they are able to improve their work position and salary. According to Maslow, this is a critical need that keeps the employees motivated. For instance, a talented employee can easily take a management job in a different country to share their knowledge and input. The company will also benefit as production and work approaches will improve where there is shared knowledge and input.
Conclusion
The balance sheet approach works both for the company and its employees. It is a win-win approach for both the company and its employees. Employees are able to expand their areas of career growth while the company will benefit from a motivated workforce. The employees are willing to shift regions and share their knowledge in regions where it is limited. They are able to feel at home despite their shift.
