BUS/325 Global Human Resource Management Week 9 Quiz (Chapter 8) – Strayer

BUS 325 Week 9 Quiz – Strayer 

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

 

 

                                

 

 

     3.   Which of the following is the foundation block for international compensation whether the employee is a PCN or TCN?

a.

Tax protection

b.

Foreign service inducement/hardship premium

c.

Allowances

d.

Base salary

 

 

                                

 

 

     4.   Which of the following involves a payment to compensate for differences in expenditures between the home country and the foreign country?

a.

Home leave allowance

c.

Cost-of-living allowance

b.

Housing allowance

d.

Relocation allowance

 

 

                                

 

 

     5.   The provision of a housing allowance:

a.

Is not often assessed on a case-by-case basis

b.

Does not ever include a fixed housing allowance

c.

Implies higher living standards

d.

May include company-provided housing

 

 

                                

 

 

     6.   The purpose of home leave allowances is to:

a.

Compensate for differences in expenditures between the home country and the foreign country

b.

Give expatriates the opportunity to renew family and business ties, thereby helping them to avoid adjustment problems when they are repatriated

c.

Cover moving, shipping and storage charges, and temporary living expenses

d.

Give employees a chance to leave their homes to tour their potential foreign assignment

 

 

                                

 

 

     7.   Relocation allowances:

a.

Do not usually cover temporary living expenses

b.

Usually cover temporary living expenses

c.

Cover discretionary items

d.

Do not usually cover moving

 

 

                                

 

 

     8.   MNEs generally pay allowances in order to:

a.

Change the living standards of employees

b.

Encourage employees to take international assignments

c.

Avoid certain taxes

d.

Discourage employees from taking international assignments

 

 

                                

 

 

     9.   Most US PCNs typically:

a.

Remain under their home country benefit plan

b.

Adopt US benefit plans

c.

Take advantage of both their home countries’ and the US’s benefit plans

d.

Do not receive benefits, only allowances

 

 

                                

 

 

   10.   Firms need to address many issues when considering benefits, including:

a.

Whether or not to maintain expatriates in home-country programs

b.

Whether or not to use the Going Rate Approach

c.

Whether or not to use the Balance Sheet Approach

d.

Whether or not expatriates should receive any social security benefits

 

 

                                

 

 

   11.   Benefits that may be provided to employees include:

a.

Base pay

c.

Vacations and special leave

b.

Tax protection

d.

Cost-of-living allowances

 

 

                                

 

 

   12.   The base salary for an international transfer is linked to the salary structure in the host country using:

a.

Tax protection

c.

The Going Rate Approach

b.

Tax equalization

d.

The Balance Sheet Approach

 

 

                                

                                

 

   13.   The Balance Sheet Approach:

a.

Is the most widely used approach to international compensation

b.

Relies on survey comparisons

c.

Creates potential re-entry problems

d.

Creates variation between expatriates of the same nationality in different countries

 

 

                                

                                

 

   14.   An advantage of the Going Rate Approach is that:

a.

There is variation between assignments for the same employee

b.

There is equality in pay with local nationals

c.

There is equity between assignments

d.

It results in fewer taxes

 

 

                                

                                

 

   15.   A disadvantage of the Balance Sheet Approach is that:

a.

There can be variations between assignments for the same employee

b.

There can be variations between expatriates of the same nationality in different countries

c.

There may be potential re-entry problems

d.

It can result in great disparities between expatriates of different nationalities and between expatriates and local nationals

 

 

                                

                                

 

   16.   The four categories of outlay incurred by expatriates that are incorporated in the Balance Sheet Approach are:

a.

Goods and services, housing, income tax and reserve

b.

Housing, base pay, goods and services and taxation

c.

Taxation, housing, exchange rate and goods and services

d.

Reserve, housing, taxation and evaluation cost

 

 

                                

                                

 

   17.   The most common taxation policy used by multinationals is:

a.

Tax protection

c.

Tax equalization

b.

Parent country national taxation

d.

No taxation

 

 

                                

                                

 

   18.   “Globals” are:

a.

Expatriates

c.

Commuters

b.

Permanent international assignees

d.

International travelers

 

 

                                

                                

 

   19.   Many multinationals respond to complexity of tax issues across countries by:

a.

Ignoring all tax issues except  for the Parent company

b.

Retaining the services of international accounting firms

c.

Having an in-house tax division to prepare all tax related forms and addresses all country tax issues

d.

Leaving all tax issues up to the employee

 

 

                                

                                

 

   20.   A firm-external theory of job worth is influenced by:

a.

Behavioral theory

c.

Cultural and institutional perspectives

b.

Level of internationalization

d.

Local market conditions

 

   

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BUS 325 Week 9 Quiz - Strayer

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