Contextual Factors of Compensation and Benefits Management to Expatriate Workforce

The future of foreign organizations’ competitiveness in the global market is contingent on those organizations’ ability to change and adapt their resources strategically to the nuances of the broadening global playing field. Based on secondary data, it argues that maintaining a domestic compensation program that supports the strategic goals of the organization and meets the needs of employee is a difficult challenge. This challenge is intensified when a similar program must be designed to operate in multiple countries with different cultures. Therefore, this conceptual paper aims to examine the right mix of factors which directly impact expatriate compensation with the most important approaches an organization should contemplate. These contextual factors include cost of living, healthcare, accommodation allowance, expatriate taxes and children’s education. Most factors often integrated as an element of the distinct strategic contingency approaches to discussions: balance-sheet approach and the going rate approach. In order to survive in a competitive world, organizations should consider the concept of ‘wholeness’ within the perspective of compensation packages. In general, this paper was proposed to augment our perceptive to expatriate compensation and using the following recommendations will help the organizations to prepare strategies for the expatriate.