Question
When an employee is transferred to another country and is assigned a salary based on the base salary for that position in the country where he will work, the employer has used a _____ salary plan.
The correct answer is
host based
Understanding Host-Based Salary Plans
The question describes a scenario where an employee transferred internationally receives a salary determined by the local pay scale of the destination country (the country where they will work). This approach is known as a host-based salary plan.
- Host-Based Plan Definition: In this system, the employer sets the employee's salary based on the prevailing compensation rates and market standards in the host country for the specific role. The goal is to ensure the compensation is competitive and equitable within the local context.
- Scenario Alignment: The employee's salary is based on the "base salary for that position in the country where he will work," directly matching the definition of a host-based plan.
Evaluating Other Options
- Home-Based Salary Plan: This plan anchors the salary to the compensation structure of the employee's home country, which is contrary to the scenario described.
- Transfer Salary Plan: This is not a standard, distinct salary plan category. While a transfer involves salary adjustments, the *basis* for that adjustment defines the plan type (e.g., host-based).
- Cost-of-Living (COL) Adjustment: While COL considerations can be *part* of an international compensation package (and sometimes integrated into host-based or balance sheet approaches), the core definition provided focuses on the local market salary, not solely on COL differences. A purely COL-adjusted salary might differ from the local base salary.
Therefore, the employer has used a host-based salary plan.
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Important Questions from Business Environment and International Business
G20 Summit (2023) Proposed which Economic corridor including shipping and rail lines?
- According to eclectic theory of foreign direct investment, foreign direct investment will occur under which of the following conditions when they are to be uniquely combined?
A. Ownership
B. Location
C. Market power
D. Internationalization
E. Vertical integration
Choose the most appropriate answer from the options given below : - For Forigen Direct Investment, it is argued that a location in question attracts FDI because it combines the unique advantage of which of the following conditions?
A. Internalisation Advantage
B. First Mover Advantage
C. Knowledge Advantage
D. Ownership Advantage
E. Location Advantage
Choose the correct answer from the options given below: - Which of the following are the reasons for substitution between domestic and MNC goods?
A. Increased knowledge of foreign products due to international information revolution
B. No need to conduct advertising campaigns
C. Transportation costs having fallen to very low levels for most products
D. Restricted international travel
E. Tastes are consistent at the global level
Choose the correct answer from the options given below: - Match List I with List II
List I List II Nature of Business Activity FDI Permitted under Automatic Route A. Trading in Transferable Development Rights (TDR) I. 49% B. Multi-Brand Retail Trading II. Prohibited C. Satellite (Establishment and Operations) III. 51% D. Petroleum Refining (by PSUs) IV. 100%
Chose the correct answer from the option given below:
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