Compensation Survey for a Select Companies in t

Symbiosis Institute of Management Studies[Constituent of Symbiosis International University (SIU)]

PROJECT REPORT A SURVEY ON COMPLETE EXPATRIATE COMPENSATION AND THE PROCESS OF REPATRIATION IN IT COMPANIES WITH INTERNATIONAL PRESENSE

FACULTY: Prof. Kingshuk Bhadury

Submitted by:Ajeet patil-4 Col Alex- 5 Avantika Thapa-9 Jaswinder kaur-19 Neha Grover-25 Pallavi Suri-26 Priyanka Chauhan-31 Rohan Mahekar-35 Saloni Agarwal-37 Shruti Mishra-40 Sumita Sanyal-45 Tuhina Singh-49Compensation and Benefits Page 1

CONTENTSCONTENT1.Executive summary 2.Introduction 3.Companies visited 4.Nature of Compensation 5.Benchmarking of jobs 6.Research Methodology 7.Analysis of questionnaire A) Employer questionnaire 7 B) Employee questionnaire 8. Relevant Graphs 9. Observations and Findings 10. Recommendations 11. Conclusion 12. References

PAGE NUMBER 3 4-7 8-11 12-19 20-27 28-29 30-39 40-48 49-57 58 59 60 61-62

Compensation and Benefits

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1. EXECUTIVE SUMMARYTHE PROJECT The project deals with a survey on complete expatriate compensation and the process of repatriation in IT companies with international presence. THE PURPOSE A lot of IT companies have offices and clients who are out of India, thus a number of employees have to travel abroad in order to work on certain projects. The purpose of this survey was to find out the various durations that an employee can go abroad for and the incentives, benefits, allowances that his dependents and an employee himself gets when he goes on-site. The second purpose was to find out if the companies that we targeted for our survey followed the repatriation cycle practically too. OBJECTIVES ACHIEVED Expatriate and Repatriate compensation is a very critical subject for all IT companies since IT being a booming sector has extended its branches to a lot of countries abroad. A lot of Indian employees go on-site to work for clients who tie up with their respective companies. 1. Defining the expatriates compensation. 2. Assessing the incentives, allowances and benefits that employees get onsite. 3. Studying the various levels, grades and bands across all surveyed companies. 4. Studying the repatriation theoretically and practically. process and understanding the same

5. Understanding the career planning aspects of companies for repatriates. SCOPE OF PROJECTCompensation and Benefits Page 3

Our research is limited to eight or nine Major IT companies and the compensation and benefits structure of employees that differs from company to company when it comes to expatriates. We also explored the various allowances, incentives etc which attract the employees to leave their host country and go on-site.


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2. INTRODUCTIONThe globalization of our world economy has evolved signicantly over recent decades as organizations have sought opportunities to perpetuate. With the spread and diversity of businesses and with firms from developing nations and transnational economies becoming more involved in global activities, it is generally felt that the levels of competition are increasing. One of the most obvious implications has been the tremendous increase in the number of employees who are being transferred to foreign countries for expanding operations globally. Employees are often sent on temporary assignments to other countries to form strategic alliances, market products and services, and start new ventures. They can be sent to work with client companies or the same companys office in the other country. The roles of an expatriate are:

An agent of direct control An agent of socialization A network builder A boundary scanner A language node An agent of knowledge-competency transfer

Expatriate Compensation Since expatriation involves the employee to be in the host country, therefore, a variety of factors can impact the total cost of supporting them and how their pay plans are designed. In general the holistic compensation should serve the following purpose: It should enable the organizations to attract potential candidates and should match local and regional standards It should be internally equitable, externally competitive in order to retain, and the system should have ease of administration It should stimulate performance/ behavior for organizational success It should be in line with the existing status hierarchy in the organization It should enable the organization to optimize its total wage level It should compensate for the inconveniences It should facilitate the transfer of international employees

Reasons for differences in compensation between countries Difference in prosperity and spending power of the company to payPage 5


The institutional frameworks within which wage bargaining takes place are quite different in different countries Cultural differences between the countries can also have an impact on the rates of pay as the total apportioning of the total sum between wages, incentives and benefits and due to appraisal methods

Definitions1. Expatriate- are the people who are citizens of base country but go for

special projects in other countries from the respective company to initiate, expand and control international operations. He or she works as a bridge between home and foreign location operations. E.g. Japanese citizen working for Toshiba in Toronto.2. Types of expatriatesa. Long-term expatriate assignments -Expatriate assignment is

referred to as a long-term assignment where the employee and his/her spouse/family move to the host country for a specified period of time, over one year. b. Short-term expatriate assignment -is an assignment with a specified duration, usually less than one year. Family may accompany employee. c. International commuter -is an employee who commutes from the home country to a place of work in another country, usually on a weekly or bi-weekly basis, while the family remains at home d. Frequent flyer -is an employee who undertakes frequent international business trips but does not relocate.3. Repatriates-

a person, when after completing international assignments, comes back to the home country, becomes a repatriate.

4. Repatriation process-

a. Preparation involves developing plans for the future and gathering

information about the new position. The firm may provide a checklist of items to be considered before the return home, for


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example, closure of bank accounts and settling bills) through preparation of the employee and his or her family for the transfer. b. Physical Relocation refers to saying goodbye to colleagues and friends, and travelling to the next posting, usually the home country. Personalized relocation assistance reduces the amount of uncertainty, stress and disruptions experienced by the repatriate and the family. c. Transition means settling into a temporary accommodation, where necessary, making arrangements for housing and schooling, and carrying out other administrative tasks such as renewing a driving license and opening a bank account. d. Readjustment involves coping with a reverse culture shock and career demands. This step is the most difficult one because of multiple factors. First, anxiety experienced by the expatriate when he or she returns home, the apprehension being accentuated by uncertainty about placement in the firm, career prospects, and a sense of isolation, coping with the new demands, etc.1. Third country nationals- people who are citizens of neither the

employees base country nor the subsidiary company. E.g. German citizen working for Toshiba in Toronto2. Local country nationals- people who are citizens of the country in

which the subsidiary is located. E.g. Canadian citizen working for Toshiba in Toronto.3. Host country- A nation in which representatives or organizations of

another state are present because of government or company invitation and/or international agreement.4. Parent country- A nation to which the expatriate belongs and goes to

a host country for international assignments, whether long or short term. It is the country where the headquarters of the company are situated.5. Types of Visas-


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a. H1- it is a non-immigrant visa. Its duration is three years, extendable to six. It is for an employee going temporarily to another country for work. b. L1- this visa is for an intra-company transfer, where an employee shifts from the office in home country to the same companys office or headquarters. c. B1- this visa is for employees going abroad for a business/conference visit. This is for a very short period.6. Tax Protection- when an expatriate is paid a gross salary and is

working in a location where the tax rates are low, the employer need to make no adjustments, but when the host country tax rates are higher than in the employees home country, the difference Is reimbursed, usually in the home country.7. Tax localization- firms withhold an amount equal to the home

country tax obligation of the parent country national, and pay all the taxes in the host country. This system is more equitable than that of tax protection and is, therefore favored by multinationals with large numbers of overseas employees.


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3. COMPANIES VISITEDTECH MAHINDRA Tech Mahindra Ltd is an Information Technology service Provider Company headquartered in Pune, India, it has 17 regional offices worldwide, 15 delivery centres across the globe and presence in 31 countries. The company has a strong global delivery model with a solid distribution of clients, although staff remains highly concentrated in India. It is a joint venture between the Mahindra Group and BT Group plc, UK. Tech Mahindra clocks revenues over USD 1.126 billion, offering end-to-end IT solutions across the value chain to worlds leading telecommunications companies. Its capabilities spread across a broad spectrum, including Business Support Systems (BSS), Operations Support Systems (OSS), Network Design & Engineering, Next Generation Networks, Mobility Solutions, and Security consulting and testing. The solutions portfolio includes Consulting, Application Development & Management, Network Services, Solution Integration, Product Engineering, Infrastructure Managed Services, Remote Infrastructure Management and BSG (comprises BPO, Services and Consulting). Branch we Visited: Sharada Centre, Off Karve Road, Erandawane,Pune. WIPRO Wipro Limited (BSE: 507685, NSE: WIPRO, NYSE: WIT) is a global information technology (IT) services company headquartered in Bangalore, India. ItCompensation and Benefits Page 9

provides outsourced research and development, infrastructure outsourcing, business process outsourcing (BPO) and business consulting services. The company operates in three segments: IT Services, IT Products, Consumer Care and Lighting. What Wipro Does: transforming your business In addition to the IT business, Wipro also has leadership position in niche market segments of consumer products and lighting solutions. Wipro makes an ideal partner for organizations looking at transformational IT solutions because of its core capabilities, great human resources, commitment to quality and the global infrastructure to deliver a wide range of technology and business consulting solutions and services, 24/7. Wipro enables business results by being a transformation catalyst Wipro worldwide presence: Middle east, Japan, France, Germany, China, ANZ WIPRO Pune offices visited:WIPRO TECHNOLOGIES LTD, Phase 1 & 2, Hinjewadi, Pune 411057. CYBAGE Cybage is a leading provider of IT solutions to a global clientele amongst the mid tier IT services companies in India. It has its corporate headquarters in Pune and has a global presence. In India it has offices and development centers in Hyderabad and Gandhinagar apart from Pune and also has international offices across various locations in the U.S and U.K. It provides IT solutions in the following Industry verticals such as Media & Entertainment, Travel & Hospitality, Retail and tourism, Healthcare and life sciences, legal, telecom and BFSI. Office visited- We visited the Pune office of Cybage located at West avenue, behind Gold Adlbas, Kalyani nagar. TCS Tata Consultancy Services Limited (TCS) is an Indian IT services, business solutions and outsourcing company headquartered in Mumbai, India. It is the largest provider of information technology in Asia.TCS has offices in over 42 countries with more than 142 branches across the globe and is a subsidiary of India's Largest Industrial conglomerate Tata Group SERVICES- IT services, IT infrastructure services, enterprise solutions, consulting,business process outsourcing, business intelligence and performance management, engineering and industrial services, small andCompensation and Benefits Page 10

medium business, connected marketing solutions software, TCE bancs, TCS technology products etc LOCATION IN PUNE VISITED:- Tata Consultancy Services Nyati Tiara, Survey No. 103/A-1/129, Nagar Road, Yerwada, Pune 411 006. iGATE-PATNI Patni is a provider of Information Technology services and business solutions. The company employs over 15000 people, and has 23 international offices across the Americas, Europe, and Asia-Pacific, as well as offshore development centres in 8 cities in India. Patni's clients include more than 400 Fortune 1000 companies. The companys global expansion began when they set up an office in London UK in 1993. It was followed by a surge of expansion in different parts of United States as well as in various European and Asian countries including Japan. Along with offices pan-India, now Patni has 28 offices worldwide iGATE acquired the shares of the major shareholders of Patni Computer Systems Limited on 12th May, 2011. These shares comprised 63% of Patnis total outstanding shares. This created an enterprise with close to $1b in revenues and 25,000 in headcount. Industry Verticals:- Financial Services, manufacturing, telecom, product engineering, life sciences, independent software vendors (ISV), retail, media & entertainment, energy & utilities, logistics & transportation. Global locations:- India, Australia, Japan, Canada, USA (north & south), Europe, middle east, Africa. Office visited:- Patni computer services Pvt Ltd, Level 0,1,2,5 & 6, tower 3, Cybercity, Magarpata city, hadapsar, Pune- 411013. L&T Infotech Larsen & Toubro Infotech Ltd. (L&T Infotech), one of the fastest growing IT Services companies, is ranked 10th by NASSCOM among the top (Indian) software and services exporters from India in 2010. It is a wholly owned subsidiary of the $12 billion Larsen & Toubro. It provides IT solutions in the following verticals: Application Development, Application Maintenance & support, Application outsourcing, Architecture services, Business Intelligence/Data Warehousing, Business process services, Consulting, Enterprise Integration, Infrastructure management services, Integrated Engineering services, Legacy Modernization, Oracle services, Product lifecycle management, SAP services, System integration services, Testing services. L&T Infotech has its presence globally across the following regions:Compensation and Benefits Page 11

India - (Mumbai, Navi Mumbai, Pune, Bengaluru, Chennai), USA, Canada, Europe, Asia Pacific, South Africa, Middle East, Australia & New Zealand. L&T Infotech Pune Office Visited: Godrej Eternia A, 4 Mumbai-Pune Road, Shivajinagar, Pune - 411005 INFOSYS Infosys Limited (NASDAQ: INFY) a global leader in the "next generation" of IT and consulting with revenues of US$ 6.35 billion (LTM Q1-FY12).Infosys defines, designs and delivers technology-enabled business solutions for Global 2000 companies. Infosys provides a complete range of services by leveraging their domain and business expertise and strategic alliances with leading technology providers.Its offerings span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing. Infosys has a global footprint with 65 offices and 63 development centers in US, India, China, Australia, Japan, Middle East, UK, Germany, France, Switzerland, Netherlands, Poland, Canada and many other countries. Infosys and its subsidiaries have 133,560 employees as on June 30, 2011. Branch Visited: Rajiv Gandhi Infotech Park, Phase II,Pune FUJITSU Fujitsu is a leading provider of IT-based business solutions for the global marketplace headquartered in Tokyo. In India Fujitsu is headquartered in Pune. With approximately 175,000 employees supporting customers in 70 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. As a wholly owned subsidiary of Fujitsu Technology Solutions Holding B.V., Fujitsu India Private Limited, will offer a broad portfolio of products and services, profiting from the strength and reliability of the global Fujitsu Group, the fourth-largest IT services vendor in the world. It will provide Fujitsus state-of-art solutions to the India market ranging from Servers, Storage Systems, Workstations, Notebooks, Desktops, Biometrics Products & Scanners. Today Fujitsus name is synonymous with top-quality equipment backed by efficient and reliable services in the world. Global presence: Africa, Asia, Australia, Central America, Europe, Japan, Middle East, North America and South America. Branch we visited: MIDC Tech Park, Talawade, Pune.Compensation and Benefits Page 12

4. NATURE OF TOTAL COMPENSATION SYSTEM

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR CLUB MEMBERSHIP (AT CERTAIN GRADES) HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSION

TOTAL COMPENSATION


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ALLOWANCES Relocation allowance Cost of living allowance Hardship allowance ( Africa) Separation Allowance Provided in Lump sum Debit cards Involuntary separation due to a) Disciplinary issues b) Performance c) DownsizingHome leave allowance (only for Australia-tax free)

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSION

TOTAL COMPENSATION Compensation and Benefits ALLOWANCES Page 14

Relocation allowance Cost of living allowance Provided in Lump sum

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR CLUB MEMBERSHIP UTILITIES EDUCATION HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSION

TOTAL COMPENSATION Compensation and Benefits Page 15

ALLOWANCES

Relocation allowance Cost of living allowance Provided in Lump sum

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR UTILITIES HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF

TOTAL COMPENSATION


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ALLOWANCES

Relocation allowance Cost of living allowance Provided in Lump sum (weekly basis)

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR CLUB MEMBERSHIP( SENIOR MANAGEMENT LEVEL) UTILITIES HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSION

TOTAL COMPENSATION Compensation and Benefits

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ALLOWANCES

Relocation allowance Cost of living allowance Provided in Lump sum (weekly basis) Education allowance

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR UTILITIES( KIT ALLOWANCE) HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSION

TOTAL COMPENSATION Compensation and Benefits

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ALLOWANCES

Relocation allowance

Provided in Lump sum (weekly basis) Car leave policy

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR UTILITIES( WARM CLOT HES ALLOWANCE) HEALTH CARE BENEFITS CULTURE BENEFITS TRANSITION TRAINING PF ACCOMMODATION/HOUSING PENSION TRANSPORT/CAR UTILITIES( WARM CLOT HES ALLOWANCE) HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF PENSIONPage 19

TOTAL COMPENSATIONCompensation and Benefits

ALLOWANCES

Relocation allowance Cost of living allowance Provided in Lump sum IN THE LONG TERM 1 MONTH SALARY IN ADVANCE

BENEFITS ACCOMMODATION/HOUSING TRANSPORT/CAR HEALTH CARE BENEFITS CULTURE TRANSITION TRAINING PF

TOTAL COMPENSATION


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ALLOWANCES Relocation allowance Cost of living allowance

Home leave allowance

5.BENCHMARKING OF JOBS

Cybage


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Tata Consultancy Services


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TECH MAHINDRA


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SYMANTEC


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FUJITSU


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L&T INFOTECH


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WIPRO


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IGATE PATNI

6. Research MethodologySurvey: Simple random sampling technique was used to conduct the survey using questionnaire for employees and convenience sampling for employers. A primary research was carried out in eight IT companies using Questionnaire method. Two different questionnaires were designed to seek responses from following: a) Employer b) EmployeesCompensation and Benefits Page 28

Sample size: The total sample size of the compensation survey is 65. Out of the total sample size sample size of employer and employees is following a) Employer= Total of 13 employers were surveyed through questionnaire b) Employees-=Total of 52 employees were surveyed through questionnaire Number of employees and employers surveyed from each company were following:No : 1 2 3 4 5 6 7 8 Company Tech M TCS L&T Wipro Infosys Cybage iGATE Patni Fujitsu Number of employers surveyed 2 1 1 3 2 2 1 1 Number of employees surveyed 8 6 4 11 10 6 5 2

Research Approach: Use of qualitative and quantitative techniques to seek information regarding the problem statement and analysis of the data obtained.

Primary Research Objective: To determine the complete expatriate compensation across IT companies in Pune To describe the repatriation process across IT companies in Pune


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Secondary Research Objectives: To understand the basic composition of pay structure of expats across IT companies in Pune To identify the long term and short term benefits provided to expats across all surveyed companies To gain insights into family support given to expat families. To gain an insight into allowances and incentives provided by the IT companies to expat. To gain insights in to repatriation processes followed by IT companies in Pune for expats whether Any agreement was signed or not The employees faced any hurdles Repat assistance was provided To gain insights into the hierarchy in the IT companies


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CHAPTER 7A

ANALYSIS OF QUESTIONNAIRES EMPLOYER


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Q2. Benefits given to you during the assignment. Objective: The objective of this question is to find out what constitutes the benefits plan offered by the various IT companies surveyed. The respondents were asked to chose from various options like Accommodation/Housing, Transport/Car, Education to children, Utilities, Club membership, Health care benefits, Culture transition training, Pension benefits, Provident fund.

Total no. of respondents - 52

Q3. What type of family support did your organization provide to you? Objective: The objective of this question is to get an idea of the different family support assistance provided by various companies to their employees on any onsite assignment.


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Q4 what are the types of incentives that you provide to your expats? Objective Expatriate compensation systems are forever trying to be not too high, not too low, but just right. The incentives must be sufficient to encourage the employee to take the assignment yet not be so attractive that local nationals will feel unfairly treated or that the expats will refuse any future reassignments. Our objective was to find out the remuneration for the expats.

The incentives mentioned by the employers were as under Compensation and Benefits Page 33

TCS - Mobility Premium According to some employees, going onsite itself is an incentive.

Q5. How was the allowances provided to you? Objective: The question attempts at finding out the mode of payment of allowances to the employees - Lump sum or any other mode specific to the company. Respondents were asked to choose from various allowances like Currency Protection Allowance, Relocation allowance, Cost of living allowance, Hardship Allowance, Separation Allowance, Spouse Assistance Allowance, Education


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Allowance, and Home Leave Allowance which they thought constituted their total allowances for the trip.

Q6. Which method do you use to calculate the compensation of your expats?Objectives A variety of factors can impact the total cost of supporting international assignees and how their pay plans are designed. Our objective was to find the various factors that contribute to the cost of international assignments. Various models are followed in different countries but our aim was to find the ones prevalent in the Indian IT sector.

LONG TERM LOCALIZATION ( COLA) employee d) Experience of employee e) Inflation, Currency f) Client preference

SHORT TERM LUMP SUM (COLA)

a) Country / tiers of city b) Designation c) Role of


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Q.7) Designation of employee and the Base Pay paid in accordance to it for both On-site and as well as in India.

OBJECTIVE: Our objective for asking this question was to know the amount of fixed compensation paid to the employee for performing specific job responsibilities and also to compare it to like positions in similar companies that are in the same industry, geographical location and past performance.

The results of a recent survey show that: Companies adjust salary ranges annually Formally assess individual performance and assign performance ratings on a Scale with three to five ratings Base salary increases on assessment of individual performance Pay increases that are primarily determined by a combination of individual Performance compared to job standards (68%), performance compared to Objectives (50%), or the market value of the position (50%)Page 36


Q.8) Do you have a career planning process for your expats?

OBJECTIVE: Our objective for asking this question was to see whether the companies are prepared to place the expats in a suitable position when they return and to revaluate their current position and see whether they have concrete goals for them and deadlines to achieve them.

TECH MAHINDR A YES

TCS

L&T

WIPRO

INFOSY S YES

CYBAGE

iGATE PATNI YES

FUJITSU

YES

NO

YES

NO

NO


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Q9. Do you sign any repatriation agreement prior to the onsiteassignment? Objective: The question aims at tapping information regarding any agreement signed between employee and employer prior to any onsite assignment for retaining the employee once he/she is back from the trip.


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Q10. Please explain the repatriation process and the hurdles faced during the same, if any Objective: The aim of this question is to find out whether companies surveyed have any structured approach for repatriation of the employees sent on various onsite assignments or not. And if not then what were the difficulties faced by the employees during repatriation.


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CHAPTER 7B

ANALYSIS OF QUESTIONNAIRES EMPLOYEE


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Q2. Benefits given to you during the assignment. Objective: The objective of this question is to find out what constitutes the

benefits plan offered by the various IT companies surveyed. The respondents were asked to chose from various options like Accommodation/Housing, Transport/Car, Education to children, Utilities, Club membership, Health care benefits, Culture transition training, Pension benefits, Provident fund.

Total no. of respondents - 52

NOTE: As per our survey, accommodation, transport, healthcare and

culture transition training were the most common benefits provided by the companies to the employees across all levels. A few companies also provided benefits pertaining to provident fund and pension facilities. Club membership is provided by Tech Mahindra and Wipro at senior management level.

Q3. What type of family support did your organization provide to you? Objective: The objective of this question is to get an idea of the different family support assistance provided by various companies to their employees on any onsite assignment.


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NOTE: In our survey, no company provided language and culture

training to the family of the expatriates. Assistance in locating spousal employment was given by TCS, Wipro, iGate Patni and Infosys in the form of guidance. Assistance in locating schools was provided by these 4 companies too. Fujitsu preferred sending single employees on international assignments. No other company disclosed any information regarding dependent visa for long term assignments. TCS helped the employees with booklets for locating banks, hotels etc in the host country.


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Q4. What were the types of incentives provided to you? Objective: The question aims at obtaining respondents view on the different incentives offered to them by their employers. The incentives mentioned by the employers were as under TCS - Mobility Premium According to some employees, going onsite itself is an incentive.

Q5. How were you provided tax reliefs? Objective: The purpose of asking this question is to find out the extent to which tax was relieved for employees sent on different onsite assignments to different countries.

LONG TERM TAX paid as per the host country in the host country Tax is globally borne by employee

SHORT TERM No tax on per diem allowance

Tax on Indian salary

Infosys employees get base salary in India (parent country) which is non-taxable during long term on-site assignment if it does not fall under tax slab. In Fujitsu & Cybage, short term per diem allowances are taxablePage 43


Tax equalization followed in TCS, Tech M, Wipro, L&T

Q6. How was the allowances provided to you? Objective: The question attempts at finding out the mode of payment of allowances to the employees - Lump sum or any other mode specific to the company. Respondents were asked to choose from various allowances like Currency Protection Allowance, Relocation allowance, Cost of living allowance, Hardship Allowance, Separation Allowance, Spouse Assistance Allowance, Education Allowance, and Home Leave Allowance which they thought constituted their total allowances for the trip.

NOTE: Almost all the companies provided Relocation allowance and

Cost of Living Allowances (COLA). Tech Mahindra is the only company that provides separation allowance, home leave and hardship allowance. Education allowance is provided by TCS and iGate Patni.

Q7 CTC and base salary (on site and off site) Objective The offsite and onsite salary difference depends on some factors. After the survey, the following factors were seen: Country / tiers of cityCompensation and Benefits Page 44

Designation Role of employee Experience of employee Inflation, Currency Client preference

Q8. Do you sign any repatriation agreement prior to the onsiteassignment? Objective: The question aims at tapping information regarding any agreement signed between employee and employer prior to any onsite assignment for retaining the employee once he/she is back from the trip.


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NOTE: As per our observation, 5 out of 8 companies made their employees sign a repatriation agreement to prevent job switches in the host country.

Q9 Was your repatriation complete in the following aspects, after returning? Compensation and Benefits Page 46

Objective The question was asked because researches showed the following 68% of expatriates do not know what their jobs will be when they return home. 54% return to lower level jobs. Only 11% are promoted. Only 5% believe their company values overseas experience. 77% have less disposable income when they return home. More than half of returning expatriates leave their company within 1 year.

Our objective was to highlight the problem of lack of guidance for designers of expat pay systems. job description career planning salary breakup social adjustment assistance repatriation assistance 7 5 7 1 5

NOTE: Out of the 8 companies that we surveyed, all of them said that

their company provided proper job description to help in the repatriation process. The salary breakup was made clear to the employees too. Social adjustment assistance is a rare feature in the industry, TCS being the only employer providing the same.

Q10. Please explain the repatriation process and the hurdles faced during the same, if any Objective: The aim of this question is to find out whether companies surveyed have any structured approach for repatriation of the employees sent on various onsite assignments or not. And if not then what were the difficulties faced by the employees during repatriation.


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CHAPTER 8 RELEVANT GRAPHS


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TS CE PO E M L YRA c m o a n/H u in c o m d tio os gCompensation and Benefits

T n p rt/C r ra s o a

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Ifs n oE P YR ML ES OAc m o aio /h ui g co md t n o s n Ta s ot r np r Ha h ae e eit elt c r b n f s Uilit s t ie Poid nf n s r v et u d Clt r t a s i nt a in u uer ni o r in g t


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Tt ln .o e p yr oa o f moes l

-2

Cb yaE p yr m lo eAc m o a n c o m d tio Ta s o tio r n p rta n

W ip

E PO E M L YRU tilitie sA c m o a n/H u in c o m d tio os gCompensation and Benefits

H a c reb n fits e lth a e ePage 52

Ta s o a r n p rt/C r

P o id n fu d r v et n

F jit uE P OE M L YRA c m o a n/H u in c o m d tio o s g T n p rt/C r ra s o a U tilitie - K A w n e s it llo a c - 1 o th mn

L&

E P OE M L YRH a C reB n fits e lth a e e A c m o a n/H u in c o m d tio o s g - 1 o th mn C ltu tra s ntra in u re n itio in gCompensation and Benefits

Ta s o a r n p rt/C r P v e tF n ro id n u d U tilitie - W rm lo e A w n e s a c th s llo a c P n io b n fits es n ee

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iG T AEE p yr m lo e

Ac m o a n c o m d tio

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EranPrt Y R MpL E O T so R althcreBennasuranca c e Ca tioefit(in w)n e lo a llo e H e C s o liv ga w n e o t f in llo a c C ltu tra s n tra in u re n itio in g H rd h a w n e( A a a s ip llo a c fric ) Pro id ra S pentFund nA w n e ev a tio llo a cPage 54


TS CE PO E M L YR R lo a na w n e e c tio llo a c C s o liv ga w n e o t f in llo a c E u a na w n e d c tio llo a c (S o s rs ip ) p no h s


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I f ss n y oEP Y MO R L E Rl cto Ao ac e a n l wne o i l Cs o lv g lo ac ot f i i A wne n l

C ybag eCompensation and Benefits

E PO E M L YR R elocation allowance C of living ostPage 56

Wr ip oE PO E M L YR

R lo a na w n e e c tio llo a c C s o liv ga w n e o t f in llo a c E u a na w n e ut u d c tio llo a c F ji s

E POE ML Y R Rl c to e ai n o ao a c l wne l Cs o lv g ot f i i n ao a c l wne l


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iG T P t AE aE p yr m lo e

R lo a na w n e e c tio llo a c C s o liv ga w n e o t f in llo a c

L&TPage 58

E P OE M L YRCompensation and Benefits

R lo a na w n e e c tio llo a c C s o liv g o t f in

9. OBSERVATIONS AND FINDINGS The compensation and benefits information is highly critical in every company. Expat compensation depends on many factors such as, different countries, experience, role, designation and client specification, and so it is very difficult to generalize the compensation levels. In the long-term, the payroll shifts to the host country and remains with the home country in short term with only lump-sum allowances. Major benefits given in all companies are Accommodation Transport Health care Other benefits given are Club membership (senior management) Utilities PF etc.

Relocation and Cost of Living allowances are provided by all companies. Employees are not very sure of the allowances/benefits given to them, with ambiguity between employers and employees inputs. Employees are not sure about provident fund and pension in the following terms: Location of accounts


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Amount of contributions

10. RECOMMENDATION

The employers must concentrate on the wholeness of employees. It means nothing less and nothing more. Employer must communicate the policies, allowances, benefits, taxes etc to the employees so that ambiguity is reduced. Repatriation agreement should be signed by the employees for H1 visa (work permit). There is ambiguity in the repatriation process of what we studied theoretically and what actually happens in the companies. There should be a SOP. Language and culture training should be provided to the families as well.


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11. CONCLUSION

Human Resource Management practices vary across borders and organizations. Both home-country and host-country economic, social, cultural, political, and legal factors influence and constrain HR functions. Corporate strategies guide and determine how HR works in an organization. Global experience and good knowledge of IHR can enhance ones career as a successful manager whether one works at the homecountry headquarters or overseas. There are various types of benefits and allowances which attract the employees to an on-site assignment. We found out that most of the organizations adopt tax equalizations as the most appropriate method of taxation. Factors on which the expat compensation depends are: a) Country/tier b) Designation c) Role of employee d) Experience e) Inflation f) ClientPage 61


The different types of compensation (as per long term and short term) depends on the tenure of the employees abroad. The survey showed a number of employees who did not know the different benefits that they get when they go on-site. There is a lot of ambiguity between the theoretical and practical aspects of various concepts that that we went through. The job description of employees is usually clear when they come back from an on-site assignment. Many expatriate assignments fail each year; approximately 30 percent due to family dissatisfaction, cultural issues, feeling of isolation from home company which usually affects the finance of the company.


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12. REFERENCES1) Compensation by Milkovich and Newman. 2) Cite hr.com 3) http://benefits.hr.toolbox.com/research/expatriate-compensation-andbenefits-policies-10050 4) http://leedsfaculty.colorado.edu/rosse/Courses/4030/PowerPoint/Expat.ppt 5) http://www.winstonbrill.com/bril001/html/article_index/articles/551600/article557_body.html 6) http://www.imercer.com/uploads/Europe/pdfs/wec_africa_condensed_c ompensation_surveys.pdf 7) http://www.mercer.com/solutions/surveys-and-products


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It is important get an understanding of how your employees perceive the international human resources policy you have put in place and why you have relocated them. It is necessary to make sure they feel good about the programs that are underway to facilitate their international assignment. You want to know you are meeting their needs. -John Fadel, Deloitte & Touche


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Compensation Survey for a Select Companies in t

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