Compensation in Multinational Companies. Models and Objectives

Download or read book Compensation in Multinational Companies. Models and Objectives written by Francesca Müller and published by GRIN Verlag. This book was released on 2020-08-07 with total page 14 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2020 in the subject Business economics - Operations Research, grade: 1,3, Heilbronn University, language: English, abstract: In this paper, the first part focuses on the importance of a compensation system and its objectives for multinational companies. In the further course of the paper, various compensation models are presented and examined for their strengths and weaknesses. In a further chapter, various principles for the design of a company's compensation policy are described. In the last point of this paper the author will give a conclusion. National borders have become less important in recent years in many ways. Companies are organizing their economic activities increasingly away from national borders. Due to this development towards a global economy, large corporations as well as more and more medium-sized companies are forced to become active worldwide. During globalization, it has been clearly observed in recent decades that requirements for global compensation of employees are changing significantly. Multinational companies increasingly must make changes in their compensation policies that initially do not match the culture and tradition of their country. A high degree of flexibility is necessary here in order to achieve positive development. Culture is a strong driver for the relationship between basic salary, variable compensation, benefits, and other fringe benefits. As a result of these developments, the tasks of personnel management in multinational companies are becoming more and more diverse and the adjustments to internationalization more and more important. Among the tasks of personnel management, compensation is of importance. The regulations in the national context are very different from those at international level. In the absence of legal and collective agreement regulations, multinational companies must be able to comply with different country-specific regulations while establishing and maintaining a consistent, strategic pattern of compensation policies and practices. HR managers must have specialist knowledge that extends far beyond the national level.