International Compensation: Business Success And Motivation

Introduction

International compensation (giving and receiving) is a natural fact that has always been linked to the existence of the human being. Before a personal, spiritual, economic or business act, compensation, salvation, happiness, satisfaction and usefulness will arise. As something natural linked to the history of humanity and society, giving and receiving are fundamentals of balance, justice, fairness and reciprocity (Burns, 2013).

Compensation refers to when one party provides an incentive for the other party to perform a certain task. In international compensation, employees receive salaries or other incentives in order to carry their duties and achieve the demanded results. Employees focuses on the incentives they receive from their employer, as it is considered the major goal of the employee while performing a certain job. Job satisfaction is also connected with international compensation, employees who are not satisfied on their working environments could be due to low compensations.

Hence, to compensate employees effectively, employers need to acknowledge the work and tasks performed by the employees in order to compensate accordingly. Being able to compensate accordingly will encourage the employee to be satisfied. Along with the war, domestic service emerged, later the musket builders with their master, official, apprentice organizational structure, as a backbone of our modern business apparatus, which served as the basis for the development of modern international compensation systems (Burns, 2013). At present, mainly in urban areas, all or most of the international compensation is received in money and through other financial and social incentives.

International Compensation

The study has stated, there are two major categories to international compensation, and these are divided into the following categories; the first of these two parts corresponds to the salary of the incentives, when they exist in an international company and the benefits granted to the staff. This reflects to the total salary package that, the employee receives as a compensation for the work that, he/she are performing on their organizations. This package should reflect the work responsibilities performed by the employee, and to ensure that, the package is adequate for the employee family (Kühne & Toyne, 2015).

A second point to consider is that, the employees’ satisfaction rate at their working environments. To analyze whether the employees are performing their duties and roles while they are satisfied, and the working condition is supporting them to work harder, and achieve better results. Hence, the work environment is connected with international compensation. This is because, if employees are being compensated to their work duties, they will be satisfied, and perform better work results.

Working condition does not only reflect good environment inside offices, but, the commitment available within organizations to improve the working conditions among their staff, to ensure a better performance among their staff. Employees should believe that, their management is focusing on developing their skills, and ensure that, employees are satisfied with the work they are performing, and receiving the needed support to complete it. Not to mention also, employees should acknowledge that, there is a fair management style on their working environment, to avoid any dissatisfaction among employees.

Overall International Compensation

At first it was recognized that the work performed in the area of international compensation and benefits was based on getting a formula that would apply to the entire population of the organization (Peter, 2014). The salary structures were rigid and were within very closed parameters, the benefit programs were of unique designs for all the members of the organization, in which the worker had to adapt to the programs and plans but not the opposite case.

Over the years, organizations have seen the need to plan the factors to be included in the salary system, to coordinate, organize, communicate, apply, control and evaluate them at the level of the organization in general and its workers. In this way, students learn how to adequately and strategically design international compensation and benefits programs and plans that could place and keep organizations at a competitive level within the market, which is an environment of constant and rapid changes.

Total International Compensation is defined as the complete reward and recognition package for the employee, including all types of benefits, money, emoluments, services and payments in kind. Total International Compensation is the value of direct and indirect payments given to the employee (Peter, 2014).

Total cash international compensation is all payments that an employer gives an employee for services rendered in international organization. In general, it basically includes three elements that are fixed payments, variable payments and incentives.

Business Success

In all societies, profitability is an important measure of business excellence. However, sometimes other criteria are also used, often coinciding with financial performance. (Joseph, 2015) identified 43 international companies that they were considered excellent. In the selection of these successful international companies, factors such as asset and capital growth, average total capital return and similar measures were taken into account. They also questioned experts from various industries about the innovation capacity of companies.

The authors cited identified eight characteristics of the companies of excellence. Specifically, these companies (Joseph, 2015):

• They were action oriented.
• They were informed about the needs of their customers.
• They promoted administrative autonomy and entrepreneurship.
• They obtained high productivity by paying close attention to the needs of their staff.
• They were governed by a philosophy often based on the values of their leaders
• They focused on the area of activity they knew best.
• They had a simple organizational structure and little administrative staff.
• They were both centralized and decentralized, depending on their circumstances.

There is another way to conceive the objective of all Human Resources Managements and to affirm that one must be productive (Kühne & Toyne, 2015). Today, governments, private industries and universities around the world recognize the urgent need to improve productivity.

Motivation And Motivators

Human motivations are based on needs, whether conscious or unconscious experienced (Crony, 2017). Some of them are primary needs, such as the physiological requirements of water, air, food, sleep and shelter. Others may be considered secondary, such as self-esteem, status, association with others, affection, generosity, fulfillment and personal affirmation. Naturally these needs vary in intensity and over time between different individuals. Motivation is a generic term that applies to a wide range of impulses, desires, needs, desires and similar forces. Motivators are things that induce the individual to achieve high performance.

While the motivations are reflections of desires, the motivators are the rewards or incentives already identified that intensify the impulse to satisfy desires. They are also the means by which it is possible to reconcile conflicting needs or highlight a need to give priority over another (Kühne & Toyne, 2015).

Motivation refers to the impulse and effort to satisfy a desire or goal. Satisfaction refers to the taste that is experienced once a wish has been fulfilled. In other words, motivation implies an impulse towards a result, while satisfaction is the result already experienced (Crony, 2017).

A person could enjoy high satisfaction in their work, but at the same time have a low level of motivation for completion or vice versa. Understandably, it is possible that highly motivated people, but with little job satisfaction, look for another job. Similarly, people who consider the position they occupy satisfactory, but who are paid substantially less than they want or believe they deserve, probably prefer to seek a new job.

Conclusion

The definition of international compensation can be seen from two points of view: By the employee and by the employer. For the Employee, it is a compensation for the effort and investment he has made in education and training, it is also the main source of income, so it constitutes a determining factor in his economic and social well-being. In essence it is an exchange relationship, which contains rewards of a financial or non-financial nature, which can be both direct and indirect. For employers, these compensations are operating costs, which must be designed and managed in an equitable and fair manner among workers.

This compensation component is generally identified as the total (financial) compensation package, although it should be noted that it is only made up of those cash payments and the benefits, services or benefits that the staff receives. The second component of international compensation is generally referred to as the work environment. Sometimes it is thought that the company must have a good climate so that the employees are at ease or feel happy in their work. This is an incorrect view of the work environment. At the end, this research aimed to identify and analyze the relationships that exist between international compensation systems and the success of international companies. For this purpose, various theoretical frameworks were introduced and explained. The objective behind the international compensation is to assess the relationship between success and motivation and different components of the compensation system (benefits, emoluments and cash payments), to verify the relationship between success factors and the index of success and motivation.

References

1. Burns, S. M. (2013). Flexible International Assignee Compensation Plans. Compensation & Benefits Review, 35(3), 35–44. doi: 10.1177/0886368703035003005
2. Crony, K. (2017). The Nine Motivators and Their Properties. Mapping Motivation, 45–63. doi: 10.4324/9781315562957-4
3. Joseph, L. (2015). Developing the Business Focus. Achieving Business Success with GIS, 41–45. doi: 10.1002/9780470985595.ch4
4. Kühne, R. J., & Toyne, B. (2015). Who Manages the International Compensation and Benefits Function? Compensation Review, 17(1), 34–41. doi: 10.1177/088636878501700104
5. Peter, L. (2014). Compensation per employee in the total economy. Journal of Human Resources, 1(1). doi: 10.1787/eco_outlook-v2014-2-table173-en