ates experience a sense of loss regarding their old cultural environment as well as confusion,rejection, self doubt, and decreased self-esteem from working in a new and unfamiliar cultural setting. If a manager and his or her family have been successfully expatriated, they become comfortable with living and working in the foreign culture. When they return home it can be almost as traumatic to them as was the original move abroad. One reason for the difficulty of repatriation is that people tend to assume that nothing has changed back home. The repatriated manager also has to cope with change and uncertainty at work. 8. What special compensation and benefits issues arise in international HRM? A firm must assess the performance of its international managers and determine their compensation. Compensation for expatriate managers usually includes a cost of livingadjustment as well as special benefits. Sometimes firms find they must supplement base pay in order to get a manager to accept an assignment in a relatively unattractive location this is called a hardship premium or a foreign service premium. This supplementis essentially an inducement to the individual to accept the international assignment. Finally, many international businesses also find they must set up a tax-equalization system. A tax-equalization system is a means of ensuring that the expatriate's after taxincome would be in the home country. The special benefits include housing, education, medical treatment, travel to the home country, and club memberships. A common special benefit involves housing. Like other components of living costs, housing expenses vary in different areas. Questions for Discussion1. How does HRM relate to other functional areas such as marketing, finance, and operations management? As with marketing, operations, finance, and accounting,the firm's managers must design an HRM strategy that promotes the company's overall corporate and business strategies. T...
