The total compensation package that equalizes the purchasing power of an expatriate manager with that of employees in similar positions in the home country and provides incentives to offset the inconvenience incurred in the location is known as the ________ approach.
A)cost-based
B)balance sheet
C)fixed cost
D)performance-linked
E)profit-based

Question

Quizplus · Accepted Answer

The balance sheet approach is designed to ensure that the purchasing power of an expatriate manager is equal to what they would have in their home country, while also providing incentives to help offset the inconvenience of the location. This approach takes into account all elements of the compensation package, including base salary, taxes, benefits, and allowances for relocation expenses, housing, education, and other costs. It is a comprehensive method and is one of the most widely used approaches for expatriate compensation.

The Total Compensation Package That Equalizes the Purchasing Power of an Expatriate