BUS 325 Week 9 Quiz – Strayer New



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Quiz 8 Chapter 8

International Compensation

TRUE/FALSE

     1.   Increased complexities in global pay include the decreased use of outsourced activities and subsequent labor pricing needs.

                                

     2.   The competing objectives of the international firm and the expatriate employee are fundamentally different from that which exists in a domestic environment.

                                

     3.   The term “base salary” acquires a somewhat different meaning when employees go abroad.

                                


     4.   Base salary must be paid in local country currency.

                                


     5.   Foreign service inducements are usually made in the form of a percentage of salary and usually amount to 30 to 60 percent of base pay.

                                


     6.   The provision of a relocation allowance implies that employees should be entitled to maintain their home country living standards.

                                


     7.   Many employers cover the expense of one or more trips back to the home country each year.

                                


     8.   The provision of a cost-of-living allowance implies that the cost-of-living in the foreign assignment is higher than at home.

                                


     9.   PCNs and TCNs do not usually receive the same treatment concerning educational expenses.

                                


   10.   Pension plans are very easy to deal with from country-to-country, as national practices are similar

                                


   11.   The Going Rate Approach is based on local market rates.

                                
                                

   12.   With the Going Rate Approach, if the location is in a low-pay country, the multinational usually supplements base pay with additional benefits and payments.

                                
                                

   13.   The Balance Sheet Approach links the base salary for PCNs and TCN to the salary structure of the relevant home country.

                                
                                

   14.   Generally the developed countries tend to rank as more expensive than developing countries because their wage costs are higher.

                                
                                

   15.   It is a common practice for MNEs to use a home-country balance sheet approach for TCNs except in the USA.

                                
                                

   16.   “Universal” pay systems may be preferred by corporate pay planners rather than having to deal with myriad “Local” systems.

                                


   17.   Firms will never provide standardized “core” pay in the global firm.

                                


   18.   Paying TCNs according to their home-country base salary can be less expensive than paying all expatriates on a PCN scale.

                                
                                

   19.   MNEs using the Balance Sheet approach to international compensation are constantly updating compensation packages for cost of living changes.

                                
                                

   20.   Obtaining up to date information on international living costs is a constant issue for multinationals.

                                
                                

MULTIPLE CHOICE

     1.   Successfully managing  compensation and benefits in a multinational context:
a.
Requires knowledge of employment and taxation law, customs, environment, and employment practices of many foreign countries
b.
Requires the use of both the going rate approach and the balance sheet approach to international compensation
c.
Does not require familiarity with currency fluctuations
d.
Does not require the use of any kind of base salary


                                

     2.   In a domestic context, base salary:
a.
Is the primary component of a package of allowances
b.
Includes cost-of-living allowance
c.
Denotes the amount of cash compensation serving as a benchmark for other compensation elements
d.
Is determined by using the Going Rate Approach


                                



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