Balancing Interest
There are two major approaches that explain the matter of compensation for expatriates. The approaches include The Going Gate Approach and The Balance Sheet Approach. The Going Rate Approach is normally on the basis of local market rates. Going Rate Approach depends on the survey comparison of the local nationals, expatriates of both all, and the same nationality pay packages. The compensation in this approach is based on the survey comparison that is selected. The base benefits and pay for the low pay countries may be boosted by an increment in payments. The base salary in the Going Gate Approach is connected to the salary structure that is in the recipient country for the international transfer ((Dowling, Engle, Festing. 2013).
The Balance Sheet Approach is normally applied in the international compensation where there is an equalization of the purchasing power of different employees that are living abroad and in the mother country and incentive provision to counter the qualitative differences that exist between the locations. The base salary in the Balance Sheet Approach is connected to the salary structure that is in the relevant mother country. The Balance Sheet Approach is commonly used in the determination of expatriates‘ compensation package by international organizations. The main objective of the Balance Sheet Approach is to maintain the living standards that is the mother country and financial inducement to make sure that the deal is attractive (Larson, Lewis & Spilker, 2017).
Reference
Dowling, P., Engle, A., Festing, M. (2013).International Human Resource Management 6th Edition.CengageLearning: United Kingdom
Larson, M. P., Lewis, T. K., & Spilker, B. C. (2017). A case integrating financial and tax accounting using the balance sheet approach to account for income taxes. Issues in Accounting Education, 32(4), 41-49.