llLM lnsLlLuLe of Plgher LducaLlon

Þerformance ManagemenL
ueveloplng
lnLernaLlonal and uomesLlc
AsslgnmenL CondlLlons
nov 17
Lh
ţ 2011
llLM Campus Ŷ new uelhl
Pusnaln Zaldl
Ìnternational Assignment Management:
" Developing and operating a system to hire, transfer and
manage resources across international borders"
Key HR Operations :
1. Developing Assignment Conditions
2. Compensation Management
3. Re-location Management
4. Tax Management
Developing Ìnternational Assignment Conditions:
Drivers :
1. Compensation
2. Benefits
3. Living conditions
4. Purpose of assignment ( import or export of knowledge)
5. Mobilization, transportation & return
Developing Ìnternational Assignment Conditions:
1. Compensation
a) Compensation model
b) Uplifts and incentives
c) Relative Hardship and danger pay
d) Cost of living and differential payments
e) Overtime or Extended work week
f ) FX issues
Developing Ìnternational Assignment Conditions:
2. Benefits
a) Social Security & Pension arrangements
b) Medical facilities
c) Ìnsurances
d) Disability protection
e) Leaves and absences
Developing Ìnternational Assignment Conditions:
3. Living Conditions
a) Accommodation
b) Local Transport
c) Communication and Ìnfrastructure
d) Education
e) Recreation
f) Social life after work
Developing Ìnternational Assignment Conditions:
4. Purpose of Assignment
a) Duration
b) Ìmport or export knowledge
c) Objectives of assignment
Developing Ìnternational Assignment Conditions:
5. Mobilization, transport and return
a) Relocation of personal affects
b) Relation of Personnel
c) Ìmmigration
d) Shipment
e) Settlement in host country
f) Return and reverse relocation
Case example :
You are the HR Manager of the Ìndian subsidiary of GSK
Beecham. The Company is testing a new health food
product and the HQ in London, UK has requested that one
of your key Product Managers, who has recently joined the
company, to be assigned to the London office for at least 6
months to assist in this testing exercise and contribute
towards the products' global marketing strategy.
The Product Manager agrees on the condition that there
would be a home visit every 6 weeks.
Case example: continued
1) What information do you need to develop a set of
assignment conditions for this move ? What are the key
points to consider ?
2) What, in your opinion, are the key challenges /
hindrances ?
3) Based on your last class, what would you keep in mind
when the assignment finishes and the Product Manager
returns to Ìndia ?
%ry to consider a macro, broad-based perspective.
Consider including all items of consequence.
Compensation Management :
"Who, How much, When and How"
Ìssues :
1. Method of computation
2. Mode of payment
3. Taxes
4. Re-assignment to different location
Compensation Management :
Method of computation:
1. Home to Host ( balance sheet approach )
2. Host based ( Localization )
3. Combination of the two
ethods of computation
Home to Host Host Based Combination
Base salary remains
as per current home
country earnings
Host Base salary is
adopted
Retains elements of
home salary but
adopts host also.
Effective when home
cost of living is high
Effective when host
cost if living is high
Most effective ÷ but
most difficult to
manage
Tax efficient Tax inefficient Tax efficient
Methods of delivery :
Split payrolls:
1. On shore salary
2. Off-shore salary
Tax Treatment
1. Tax Equlisation
2. Tax Protection
Tax Equalization:
. Employee liable for hypothetical home country tax
2. Company pays host country tax liability
Tax Protection
. Employee pays for actual host country tax
2. Limited to extent of hypo home tax.
Case Example:
$eema Biswas has been assigned to the Warsaw office
effective Jan 200. $eema's current income in India and
other details have been provided in a separate sheet.
You are required to do a quick evaluation of what would be
the most appropriate method for compensating Seema.
What, in your opinion, are the key issues related to your
recommendations ?

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