Deck 11: International Compensation, Benefits, and Taxes

Question 1

Global remuneration deals with the compensation and benefits structure for employees of the MNE in various locations/subsidiaries around the world.

Answer 1

True

Question 2

International assignment compensation deals with the compensation and benefits of globally mobile employees-or those who cross borders as part of their employment with the MNE, either short-term international assignees or long-term expatriates.

Answer 2

True

Question 3

In general, labor costs have relatively decreased over time in most countries.

Answer 3

False

Question 4

MNEs often create three classifications about compensation:

Question 5

A defined benefit plan pays a fixed periodic benefit upon retirement.

Question 6

A defined contribution plan distributes the retirement benefit based on contributions to the plan.

Question 7

Most countries and companies make an effort to consider religious observances of all or most major religions.

Question 8

Stock options have virtually no impact on shareholder value.

Question 9

American MNEs have experienced few difficulties extending their employee stock ownership plans overseas.

Question 10

One of the most important considerations for MNEs in the design of their IA C&B programs is the problem of comparability

Question 11

The housing norm is a normative expense for housing in the host country.

Question 12

The localization approach addresses many problems of low cost and perceived equity among staff in foreign subsidiaries.

Question 13

The general rule is that, as the currency exchange rate goes up, the firm's compensation differential to the international assignee goes down.

Question 14

Inflation/deflation can occur in either the home or host country or both.

Question 15

Countries with social security systems negotiate 'Totalization agreements' with each other so that international assignees do not face double taxation.

Question 16

The salary-benefit ratio, or the amount of compensation that is salary versus benefit, may also differ by country as a result of

A) cultural practice.
B) laws.
C) regulations.
D) all of these

Question 17

MNEs are beginning to examine flexible benefits for their global operations, designing global flex-benefit plans because

A) they have been successful in the US.
B) as a way to provide diverse benefits to all workers.
C) as a way to attract workers with diverse benefit needs.
D) all of the above.

Question 18

____________ parity is a commitment to offering something from each core category of benefit to every employee worldwide.

A) Absolute
B) Relative
C) Qualitative
D) Quantitative

Question 19

In at least one survey, ___ percent of expatriates surveyed were dissatisfied with their salaries and benefits and their international compensation packages in general.

A) 22
B) 44
C) 77
D) 88

Question 20

Maintaining competitive and equitable salaries and benefits among the various operations of the organization is one component involved in managing the problem of _____________.

A) comparability
B) co-existence
C) uniqueness
D) bargaining

Question 21

Which of the following objectives must the compensation package of international assignees meet to be effective?

A) providing an incentive to leave the home country for a foreign assignment
B) maintaining a given standard of living
C) taking into consideration career and family needs
D) all of these

Question 22

Approaches to determining international assignee compensation include all of the following EXCEPT

A) negotiation.
B) income statement.
C) localization.
D) lump sum.

Question 23

When designing financial packages for IAs, we also need to pay close attention to non-compensation factors such as_____________ to ensure overall satisfaction.

A) career planning
B) base pay
C) competitive salary
D) none of the above

Question 24

The ________________________ is the norm for goods and services or the portion of salary spent on goods and services in the home country according to salary and family size of the international assignee.

A) differential country spendable
B) home country spendable
C) host county spendable
D) none of these

Question 25

The ________________________ is the amount for goods and services that the international assignee is expected to spend in the host country as an international assignee or the amount needed for the spendables in the assignment location.

A) differential country spendable
B) home country spendable
C) host county spendable
D) None of these

Question 26

The extent of hardship in an overseas posting is evaluated using the following criteria?

A) Physical threat
B) Level of discomfort
C) Inconvenience
D) All of these

Question 27

Cultural isolation is considered within the following categories in evaluating the extent of hardship in an overseas posting?

A) Physical threat
B) Level of discomfort
C) Inconvenience
D) Localization

Question 28

A(n) ____________________ agreement exists between countries that have established social security systems - they have negotiated bilateral social security treaties with each other in order to eliminate double taxation.

A) coordination
B) equalization
C) balancing
D) Totalization

Question 29

List the five main objectives for the typical MNE global C&B program.

Question 30

What is the global law of economics?

Question 31

What is implied by an MNE adopting the global staffing approach?

Question 32

Describe three options that MNEs have for establishing a worldwide compensation system.

Question 33

Discuss the various approaches to IA compensation?

Question 34

Explain the basic objectives of global compensation and benefits

Question 35

Identify and discuss the major issues related to the effectiveness of global remuneration plans

Question 36

Explain the difference between global remuneration and international assignment compensation.