Assessment about International Payment Essay Example

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6International Payment Assessment

International Payment Assessment

International Payment Assessment


When a company expand to international markets and send employees to a new country such as Iran, it needs to take over other responsibilities different from fundamental human resource management (Treven, 2014). For a money payment company opening a subidiary, there will be a need to get a subsidiary senior manager, junior manager,proffesional supervisor, administrator and a blue collar expatriate.The subsidiary managers will be involved in setting goals and controlling the activities of the company (Treven, 2014).The proffesional supervisor will be incharge of making sure that the goals set by the managers are met.The company administrator will be employed as a local individual, who will be cordinating the office activities and interacting with locals clients on a daily basis.This means that, the administrator must be fluent in Arabic language. All of this expatriates will be taken from the company’s headquater in Madrid.The selection criteria will be based on academic and proffesional qualifications of the candidate. The remuneration package and other benefits will be dependent on the responsibilities of the employee, market survey,incentives and competency (Treven, 2014).

Payment ApproachStrategy

To fairly remunerate the expatriates, the company will adopt the Home-Based approach (Hall, 2015). The strategy, is also known as the balance sheet approach. It .The approach gives the expatriate a compesation package that ensures equity between the assignment work loads atin home and host countries (Treven, 2014). The balance sheet approach utilizes the human resource systems used in Madrid to manage operations in Tehran .The reason is to ensure that, the expatriate is protected from the cost difference arising between from the home and host country. Also,In addition, the approach home based strategy is applied to make sure that an expart does not lose or gain any financial benefit by taking the new duties.The approach is used by more than 64% international companies, with a good example being Mercer (Expatriate Management Focus on Middle East, 2015).

Expatriate Payment Packages

The company’s remuneration package, will reflect the three major expatriate packages (Hall, 2015)Tthe package is also not characterised bywith the huge financial benefits as compared to the Full package education, hardship, hometravel and automobile allowances.The education allowance is given to executives who havewith children below eighteen years, therefore a senior manager with two children aged 10 and 15 will be entittled to education allowance. Lite package include mobility premium, house and hardship allowances. However,s some of the benefits included in Full package with exception of education allowance..The packages are categorised as, Full Expat, Lite expat and Local Hire payment packages.The Full expat package is given to executives, which in this case will include the subsidiary managers.The Full expat package include relocation and some or all of the housing, )(M. Heathfield, 2016. Proffesional supervisor and blue collar expats will fall be categorised under this categorysection .Local Hire package is not associated with the mentioned benefits, an individual contracted under this package, will be entittled to a payment which is same similar to the remuneration an individual in the host country receives when working at the samein similar level (Hall, 2015).

Base Salary

The company should provide base salary depending on the employee category of the employee((Hall, 2015). Base salary is the amount that is paid to an employee by the organization for the work done (M. Heathfield, 2016):

The Senior Manager’s Base Salary

The senior manager will receive an annual base payment of USD. all the benefits found underin the Full package. 124,905 andplusThe senior manager will be the highly compesated expatriate, because his job entails managing the whole entire subsidiary and providing reports to the home branch on the subsidiary’s progress. of the subsidiary.

Junior Manager’s Base Salary

Junior manager will be paid USD.104, 000. In addition, he will receive mobility premium, house and hardship allowances. Unlike Senior manager, he will not receive education allowances and some of the benefits found underincluded in the Full package. This is because, the senior manager has more responsibilities than junior manager., though Nnevertheless, the two titles all of them are responsible for setting goals of the subsidiary’s goals.

The Proffesional Supervisor’s Base Salary

The proffessional superviscer will be paid annual base salary of USD.84, 000 plus benefits associated with Lite package. The supervisor’s dutiessupervisor’s duties are slightly different to the managers. He is in charge of monitoring the overall progress of the company’s department but unlike the junior and senior manager, he does not set the objectives of the subsidiary.

Blue collar Expatriate’s Base Salary

He will be in charge of handling any blue-collar jobs in the company. This involves contracting the necessary people with technical knowledge to assist him. He will be paid USD. 64000 and benefits found under Lite package

Local’s Base Salary

The local will be paid USD. 54,000 base salary without any benefits, because that is the range of payment for employees working at the same level in Tehran (Hall, 2015).

Mobility Premium

The mobility premium, also known as Relocation expenses, consists of all expatriate’s initial costs of relocating to the host country (Hall, 2015). The relocation amount entitled to each expatriate, depends on his responsibilities:

Senior manager

The specific amount for relocation willamounts for relocation will be USD.10328 for senior manager. He will be allowed to move with his spouse and two children below eighteen years. This is to enable him settle comfortably in Tehran and focus on developing the subsidiary.

Junior Manager

The junior manager will be paid mobility allowance of USD. 8954. He will be allowed to shift with his spouse to Tehran.

Professional Supervisor

He will be entitled to USD. 7954 mobility package.

Blue collar Expatriate

He will be entitled to USD. 5924 to cater for his relocation.

The Local

He will not be entitled to any mobility premium, he is expected to cater for his own relocation expenses (Hall, 2015).

Hardship Allowance

Hardship category, assesses the average quality of life at a duty station (Hall, 2015).According). According to the United Nations’ standards,expatriatestandards, expatriate working in a developing country is entitled to hardship allowance (Hall, 2015)
)(P. Rhodes, 2014. The hardship allowance depends on the position held and associated responsibilities. The individual with many responsibilities receives highest hardship allowance than the one with few responsibilities.

Senior Manager.

The managers will receive highest annual hardship allowances at USD.11328.

Junior Manager

The junior manager will be paid USD.9328 annual hardship allowance.

Professional Supervisor

Professional supervisor will get annual hardship allowance of USD.7328

Blue collar expatriate

He will be entitled to USD.5328 annual hardship allowance.

The Local

The local employee will be given annual allowance of USD.4328.

Proposed Remuneration Table for Expatriates’ Base Salary, Mobility Premium and Hardship Allowance


Annual Base Salary

Mobility Premium

Hardship Allowance (USD)

Senior Manager

Junior Manager


Blue collar expatriate

Table Source: Mercer Global HR Monitor 2015-1 US=0.000031 IRR

The international human resource management concerns itself with the management of human resource on theglobally basis. For an international company opening a subsidiary in Tehranhome-based strategy will be more effective.The home-basedapproachapplies the homepractices of human resource management. The approach ensures that the expatriates maintains the same similar financial position they were entittled back atat their precious work place home. The employees are categorised in different payment pckages.The remuneration employee remuneration will rely depends on the position and responsibilities held by the individual..


Clements Worldwide. (2016). Iran. [online] Available at: [Accessed 15 Nov. 2016].

Expatriate Management:FocusManagement Focus on Middle East. (2015). 1st ed. [ebook] Madrid: Mercer, pp.15-18. Available at:…/expat…/Expat_Management_in_Middle_East.pdf [Accessed 16 Nov. 2016].

Hall, B. (2015). Expatriate Pay and Benefits — What to Include in Negotiations. [online] Available at: [Accessed 15 Nov. 2016].

M. Heathfield, S. (2016). What is Base Salary and Who Receives It?. [online] The Balance. Available at: [Accessed 15 Nov. 2016].

P. Rhodes, K. (2014). International Civil Service Commission. 1st ed. [ebook] p.7. Available at: [Accessed 16 Nov. 2016].

Treven, S. (2014). Human Resource Management in International Organizations. Ph.D. University of Maribor, School of Economics and Business.