Base pay is the amount of money an employee is compensated in exchange for services, excluding additional payments such as bonuses, benefits, and raises ( Roberts & Dolasinski, 2020 ). Employers consider various systems for their employees working abroad to manage conflicts and compensation costs related to international assignments. The essay discusses the weaknesses and strengths of the home country pay, headquarters, and host country base pay methods in international contexts.
Base compensation on the home country is designed to maintain the employee's home country payroll. This implies that the employees have no additional benefits or risks relating to performing a similar assignment either at home or the host country; hence it is fair. From a monetary perspective, the assignee's pay based on the home country is easily re-integrated since it maintains the home country's link to the compensation structure. The compensation also promotes mobility in that the employee is not subject to financial problems associated with their assigned location. An expatriate may be employed for low base pay, which is a strength to the company. However, since the employment is on a short-time basis, it is difficult for the workers to adjust to cultural changes taking training costs into account.
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Headquarters based pay compensates the labor force according to headquarters' pay scale. This method is more profitable for expatriates who change a job to another in an international country. The headquarters payment system is efficient and straightforward as it does not consider citizenship but applies the same pay standards of a country to all workforces. The company is capable of shifting excellent abilities in the organization to other localities. Nevertheless, the method is associated with adjustment and adaptability weaknesses between the employer and the employee.
Lastly, the host-based payment system compensates assignee in line with host country pay scale standards. There are several standards that a country uses to decide the pay scale, which includes the experience of jobholders, job evaluation techniques, and market pricing ( Conroy, 2019 ). An expatriate's base pay ought to be competitive to that of host country employee's base pay. It more appropriate for long-duration assignments. Therefore, this method's strength is allowing the host country to fix similar standards in the entire locations, while on the other hand, the pay scales differ with locations.
References
Conroy, S. A. (2019). Setting base pay rates: integrating compensation practice with human capital value creation and value capture. In Handbook of Research on Strategic Human Capital Resources . Edward Elgar Publishing.
Roberts, C., & Dolasinski, M. J. (2020). Compensation Analysis: Hospitality Educator Salary Study. Journal of Hospitality & Tourism Education , 32 (1), 25-31.
