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.
