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IRHR 3540 Presentation

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Alisdair Tulloch

on 12 September 2013

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Transcript of IRHR 3540 Presentation

Case 6: Robert Bosch GmbH
International Assignment Policy
Complexities of expatriate compensation:
Challenging locations
exchange rates
recruitment for emerging markets

- Founded in 1886
- 92% owned by the charity 'Robert Bosch Stiftung'
- 8% owned by the Bosch family
- Employs over 300,000 people

An essential aspect of compensation packages is to attract and retain valuable employees

Incentives for foreign service, tax equalisation and reimbursement for reasonable costs are vital

Klaus Meler must tackle these issues in redesigning a new international assignment policy
"Expatriate compensation at Robert Bosch GmbH: Coping with modern mobility challenges."
Q4: Local Plus Approach
Thus, compensation packages must be competitive on a global scale

Emma Martin & Alisdair Tulloch
Q1: Cost of living allowance
Q5: Pros and Cons of outsourcing
Q6: Alternative Assignments

Cost benefit
Closer control
Constantly changing local laws and regulations

Cost Benefit
Poorer Cohesion
Quality Control
Communication with senior Bosch management
Organisational culture

Brock et. al., 2008

Availability of travel
Information Technology
Expatriates more eager
Lower costs
Fewer returns

Requires investment
HRM intensity of short-term relocations
Q7: Localisation Barriers
Loss of benefits/compensation
Establishing local salary and family support
Consistency from HRM in a plethora of intricate economies
Individual and/or career plans, ambitions
Cultural misalignment
Q8: Additional Foreign Assignment Allowances

Samuel Aryee, S., Yue Wah Chay, Y. W., & Chew, J. 1996. An Investigation of the Willingness of Managerial Employees to Accept an Expatriate Assignment. Journal of Organizational Behavior , Vol. 17, No. 3; pp. 267-283

Dowling, P., Festing, M. & Engle, A.D. 2010. International Human Resource Management: Managing People in a Multinational Context. Andover : Cengage Learning: 4th Edition

Dowling, P., Festing, M. & Engle, A.D. 2013. International Human Resource Management: Managing People in a Multinational Context. Andover : Cengage Learning: 6th Edition

McNulty, Y. & Inkson, K., 2013. Managing Expatriates: A Return on Investment Approach. Business Expert Press


Willingness to partake in foreign assignments
Increased employee satisfaction
Ability to attract more qualified/adept managers

Dissatisfaction of equivalent workers in local community
Number of Bosch expatriates
Standard Home Base Index

Cost Effective Home Base Index
Familiar with sourcing cheaper local products
Does not have misguided expectations
Easily adapt to lifestyle
Q2: Cost Reduction
Top 5 Criteria
1. Base salary (71%)
2. Partner support (60%)
3. Expatriate career guarantee (58%)
4. Education (41%)
5. Location Bonus (32%)
Q2: Cost Reduction
Cost Reduction Implemented
Relocation allowance
Efficient cost of living calculations
Housing allowances
Travel expenses

Not Implemented
Cap on allowances
(McNulty & Inkson. 2013. p.49)
Q3: Cost Reduction
Simple to implement
Fair pay structure

Overlooks individual needs
Retention of valuable employees difficult
(McNulty & Inkson, 2013)
(Dowling, Festing & Engle, 2010)
(Dowling, Festing & Engle, 2010)
(Dowling, Festing & Engle, 2010)
Q3: Cost Reduction
The Going Rate Approach
Salary is linked to the pay structure of host country
Pay equality
Simple implementation

Global Compensation Package Approach
Focus less on “expatriate status”
Remunerating international employees Performance based
(Dowling, Festing & Engle, 2013, pg 165).
(McNulty & Inkson. 2013. Pg 53).
Q3: Cost Reduction
Full transcript