Japan is a highly productive country. Their pay system is a combination of various factors. They pay their workers based on seniority, ability and performance. If we consider the international pay structure then we will see that- seniority is giving high preference worldwide. In Germany they give emphasize on job evaluation and seniority.
A global study of pay systems used by companies with worldwide operations identifies three general compensation strategies:
Now Japan is undergoing some difficulties. They mostly give high priority to senior workers for that reason younger employees are switching their jobs in Japan frequently. USA Based firms give emphasize on the performance and for that reason they introduced performance based pay system in their companies. This performance based pay system is now spreading worldwide and most of the countries are now following this pay system.
Localizer: “Think Global, Act Local”
Exporter: “Headquarters Knows Best”
Globalizer: “Think and Act Globally and Locally
Elements of Expatriate Compensation (Latest Pay System Includes)
Salary: the base salary plus incentives (merit, eligibility for profit sharing, bonus plans, etc). For expatriate jobs is usually determined via job evaluation or some system of “Job leveling.”
Taxes: Companies are now paying individual taxes.
Housing: Most companies pay for housing expenses for expatriates.
Allowances and Premiums: Cost of living expenses, club membership, transportation assistance, childcare, child education, spousal employment, local cultural training and personal security are some of the many service allowances and premiums paid by the companies. The logic behind is that
- Expatriate work with less direct supervision than a domestic counterpart.
- Live and work in strange surroundings.
- Represent the employer in that country.
On the other hand, considering the high cost, Negotiation approach is getting popular. It is based on mutually agreeable package win-win for both employer and employee.