Question 1

In a ______ approach to expatriate compensation,the expatriate's compensation is based on local (host-country)norms.

Accepted Answer

In a localization approach, the expatriate's compensation is based on local norms, which means that the expatriate is paid based on the salary and benefits of local employees in the host country. This approach is usually used for short-term assignments and aims to reduce expatriate costs while still providing a competitive compensation package.

Question 2

______ is a process where the organization pays the individual partly in home-country currency and partly in the currency of their work location.

Accepted Answer

Split pay involves paying the employee partially in the home-country currency and partially in the currency of their work location. This is done to mitigate the risks associated with currency fluctuations and to incentivize employees to work in locations where the cost of living is higher. Singular pay, trade bloc pay, and onshoring pay are not relevant to this concept.

Question 3

When Reagan begins her expatriate assignment in Florence,Acme Global will pay her half in U.S.dollars and half in euros.It appears Acme Global took the ______ approach to Reagan's compensation.

Accepted Answer

The split-pay approach involves paying an expatriate part of their salary in their home country's currency and the remainder in the local currency of the country they are working in. Since Reagan is being paid half in U.S. dollars and half in euros, this matches the definition of a split-pay approach.

Question 4

When Acme Global asked Tamera to relocate to the company's newest foreign plant,it paid her a salary equal to what she was making in the United States and gave her an allowance for extra expenses.It appears Acme Global is using the ______ approach to expatriate compensation.

Accepted Answer

The balance sheet approach to expatriate compensation involves paying the employee a salary equal to what they would earn in their home country, while also providing an allowance to cover additional expenses in the host country. This is consistent with the compensation package that Tamera received, indicating that Acme Global is using the balance sheet approach.

Question 5

Acme Global recognizes that different employees have different compensation needs when on expatriate assignments.Therefore it has a compensation specialist sit down with each employee before the assignment to work out how the employee will be compensated.It appears Acme Global is using the ______ approach to expatriate compensation.

Accepted Answer

The compensation specialist meeting with each employee to work out an individualized compensation package indicates the use of the negotiation approach to expatriate compensation. The lump-sum approach provides a one-time payment to cover all expenses related to the assignment, the split-pay approach pays a combination of local and home country compensation, and the localization approach adjusts compensation to match local standards. None of these approaches involve an individualized negotiation between the employee and a compensation specialist.

Question 6

Using the ______ approach to expatriate compensation,the organization continues to pay the individual at a rate equivalent to their home-country salary,while providing allowances to enable that employee to maintain their standard of living.

Accepted Answer

The balance sheet approach to expatriate compensation involves the organization continuing to pay the employee at a rate equivalent to their home-country salary, while providing additional allowances to cover the cost of living in the host country. This ensures that the employee's standard of living is maintained, while also taking into account the potential for fluctuating exchange rates.

Question 7

Acme Global recognizes that different employees have different compensation needs when on expatriate assignments.Some may need compensation to pay for their children's education.Others may work in areas where they must pay high taxes.To avoid having to design an individualized pay package for every employee,Acme Global gives every expatriate employee a set amount for extra expenses.It appears Acme Global is using the ______ approach to expatriate compensation.

Accepted Answer

Acme Global is using the lump-sum approach to expatriate compensation, which provides a fixed amount of money to cover various expenses related to an international assignment instead of tailoring compensation to the specific needs of each employee. This approach offers simplicity and flexibility to both the employer and the employee but may not fully address individual circumstances.

Question 8

The most common method to manage expatriate compensation is called the ______ approach.

Accepted Answer

The balance sheet approach is the most commonly used method to manage expatriate compensation. It involves tracking the employee's home country compensation package and adjusting it for cost-of-living differences and additional allowances in the host country. This approach aims to maintain the expatriate's standard of living and provide equitable compensation for their work.

Question 9

In the ______ approach to expatriate compensation,the employee receives compensation based on the host country's ordinary pay structures and then receive allowances to allow them to more closely match their living standard in their home country.

Accepted Answer

The local-plus approach is when the employee receives compensation based on the host country's ordinary pay structures (local) and then receives allowances (plus) to allow them to more closely match their living standard in their home country. This approach is also known as a balance sheet approach.

Question 10

Before going on her expatriate assignment to Lisbon for Acme Global,Amy had a meeting with a human resources manager to decide her compensation.It appears Acme Global took the ______ approach to Amy's compensation.

Accepted Answer

The negotiation approach involves discussing and deciding compensation through a meeting between the employee and the employer, which is what Amy did with the HR manager.

Question 11

Zachariah just accepted an expatriate assignment in Berlin with Acme Global.He will be paid based on German norms and be paid in euros.It appears Acme Global took the ______ approach to Zachariah's compensation.

Accepted Answer

The localization approach refers to paying employees based on the host country's norms and currency. Therefore, paying Zachariah based on German norms and in euros is an example of localization. The other options are not applicable as they either involve adjusting pay below local norms (local-minus) or negotiating a compensation package (negotiation).

Question 12

Laura accepted a temporary expatriate assignment.Since she will be keeping her apartment in her home country and getting a temporary apartment in her host country,she asked to be paid partly in her home-country currency and partly in her host-country currency.Laura is requesting the ______ approach to expatriate compensation.

Accepted Answer

The split-pay approach to expatriate compensation involves paying the employee partly in home-country currency and partly in host-country currency. This approach is often used when the employee maintains financial obligations in their home country, such as an apartment or mortgage. The balance sheet approach involves providing allowances or reimbursements for expenses incurred due to the international assignment, while the localization approach involves paying the employee based on local market rates. The lump-sum approach provides a fixed amount of money for the employee to cover all expenses related to the international assignment.

Question 13

In a ______approach to expatriate compensation,the organization pays the expatriate a set amount of money to use on items such as taxes,vehicles,housing,and similar items during their assignment.

Accepted Answer

A lump-sum approach to expatriate compensation involves paying the expatriate a predetermined amount of money for expenses such as housing, taxes, and transportation during their assignment. This approach is often used to simplify the compensation process and give the expatriate more flexibility in managing their finances. It is also easier to administer for the organization than other approaches, such as pure localization or international-minus, which involve more complex calculations and negotiations.

Question 14

When setting expatriate compensation policy,the function of "significance" in ______ theory must always be considered.

Accepted Answer

Expectancy theory emphasizes the importance of the perceived fairness and significance of rewards in motivating employees, including expatriates. It suggests that employees are motivated when they believe their efforts will lead to significant and valued outcomes.

Question 15

______ generally should include a series of steps that need to occur in order to get the employee back into the home-country work routine.

Accepted Answer

Repatriation refers to the process of bringing an expatriate employee back to their home country. As part of this process, a series of steps is typically implemented to help the employee readjust to their home-country work routine. These steps may include debriefing sessions, cultural training, and other forms of support to ensure a smooth transition back to work in the home country.

Question 16

Myra will be moving to London as part of an expatriate assignment.Rather than try to figure out how to add-on to Myra's compensation,the organization decides to pay her as if she was a member of their London workforce.It appears Myra will be paid under the ______ approach to expatriate compensation.

Accepted Answer

The localization approach involves paying the expatriate as if they were a local employee, so Myra will be paid under this approach. The balance sheet approach would involve calculating and adding on various allowances to Myra's compensation to ensure that she is not financially worse off during her assignment. The split-pay approach involves paying the expatriate a base salary in their home country currency and a local currency allowance, while the negotiation approach would involve negotiating a compensation package specific to Myra's unique needs and circumstances.

Question 17

In a ______ approach to expatriate compensation,the employer and employee mutually agree on a compensation package.

Accepted Answer

In a negotiation approach to expatriate compensation, the employer and employee discuss and agree upon a compensation package that is tailored to the needs of both parties. This approach allows for flexibility and can address any unique circumstances or concerns of the employee. The other options listed (local-minus, national-plus, international-minus) are more rigid and may not take into account the individual needs and preferences of the employee.

Question 18

Culture shock can cause significant problems for the expatriate employee,and in fact there is evidence that up to ______% of employees fail to complete their international assignment.

Accepted Answer

Culture shock can have a severe impact on expatriate employees,leading to stress, anxiety, and difficulty adapting to new environments. According to research studies, up to 50% of employees fail to complete their international assignments due to culture shock and related issues.

Question 19

Allison just accepted an expatriate assignment with Acme Global in Estonia.To cover her expenses,Acme Global paid her a set amount of money to use on items such as taxes,vehicles,housing,and similar items.It appears Acme Global took the ______ approach to Allison's compensation.

Accepted Answer

With a lump-sum approach, the employer gives the employee a set amount of money to cover all expenses related to their assignment. This is different from the international-minus approach, where the employee receives a salary adjustment based on differences in cost of living between their home country and the host country. The negotiation approach would involve some sort of bargaining or agreement between the employee and employer regarding compensation, while the pure localization approach would involve paying the employee based solely on local market rates. In this scenario, it seems that Allison is receiving a set amount of money to cover her expenses, which indicates a lump-sum approach.

Question 20

______ communication uses items that we surround ourselves with,such as jewelry,clothing,or even the car we drive.

Accepted Answer

Symbolic communication uses items that have a meaning attributed to them, such as jewelry, clothing, or cars. These items symbolize something and communicate that meaning without the use of words.

Quiz 16: Global Issues for Human Resource Managers

In a ______ approach to expatriate compensation,the expatriate's compensation is based on local (host-country) norms.