Question

A human resource manager wants to create compensation equity between assignments for an expatriate. The idea is to address the cost-of-living differences relative to parent-country levels and add a financial inducement to make the package attractive. Which approach should the manager use?

a. balance sheet
b. going rate
c. performance appraisal
d. training

Answer 1

The human resource manager should use the balance sheet approach to ensure compensation equity for an expatriate, considering cost-of-living differences and providing incentives to maintain the home-country living standard.

Step-by-step explanation:

The human resource manager should use the balance sheet approach to create compensation equity for an expatriate. This approach focuses on maintaining a home-country living standard while working abroad, plus providing additional financial incentives. The balance sheet method takes into consideration various factors such as cost-of-living differences, housing, education, and any other allowances to ensure that the expatriate's standard of living is not diminished due to international assignment.

This approach aims to make international work opportunities attractive without causing financial loss for the employee, in line with the principle that people should be rewarded according to the costs they incur in their work activity. It also addresses the efforts and additional expenses an expatriate might incur while living in a foreign country.