Global Compensation and Benefits Strategy

As one of the world’s leading providers of consumer electronics, this multinational competes for talent in an increasingly competitive and dynamic labor market where attracting top-notch candidates requires more than a “one-size-fits-all” compensation model. Growth, diversification and the increasing complexity of our businesses require more flexibility, creativity and transparency in compensation and benefits strategy. Designing a competitive compensation and benefits plan for this organisation can help it stand out in the job market (Okeke & Ikechukwu, 2019). When designing a compensation and benefits plan in Taiwan, the organisation needs to put into consideration market standards and compliance requirements to achieve a competitive business model. The company’s team helps achieve the business vision and a well-designed compensation and benefits plan is critical to employee recruitment and retention. These arrangements are also very important for the firm’s legal compliance. Employment laws in all countries contain minimum requirements for employees employed under the relevant regulations.

When developing a benefits plan, we must put these standards and laws outlined in the local labor market into consideration. Many organisations opt to offer additional benefits that go beyond those necessitated by law. These supplementary requirements make the plan competitive with other enterprises in the sector, so more applicants will apply for the vacant job positions. Example of fringe benefits may include:

  • Dental insurance
  • Guaranteed benefits in Taiwan
  • Rewards programs
  • Telecommuting offers
  • Transportation allowances
  • Tuition reimbursement
  • Vacation bonuses

As an employer, we are responsible for being familiar with Taiwan labor regulations and developing a benefit plan that addresses them. The guaranteed benefits described in the labor law include paid annual leaves, paid sick leaves, and paid public days off. Leave policies vary depending on the length of service the employee in question has with the organisation. For example, workers should be given seven days of paid annual leaves in their first year and 14 days from their ninth year of service.

When the company is prepared to design its compensation and benefits plan, the management needs to strike equilibrium between the firm’s financial capabilities and the provision employees expect from the employer. This process, consisting of three steps, can be meaningful in designing our benefits package.

Consider the firm’s resources: Keeping compensation and benefit expenditures within a particular percentage of our revenue will ensure that we do not overstretch the company’s resources. Due to the COVID-19 pandemic, the company incurred a 40% decrease in overall revenue. It is therefore prudent to evaluate the revenues and determine how much the firm wants to spend on rewards and benefits. At this point, we should also consider our major goals and how the goods we deal in can contribute to them. For example, we need to consider whether the organisation wants to channel its resources on recruitment, or would it instead spend money and time on retention.

Research employee needs: Employees consider the compensation and benefit offerings when applying to work in this organisation. So it is in the best interest to explore their needs and expectations. One strategy for achieving this is taking a survey of workers in the area or look at the benefit provisions of enterprises similar to ours. It is worth noting that workers’ expectations differ in regard to the industry and location of the company.

Design employee compensation and benefits plan: Once we have obtained all the information, we can begin the design phase. At this juncture, employee research and financial assessment to find a balance between workers’ needs and our resources will be considered. First, we will determine the benefits we need and allocate the remaining funding for supplementary benefits.

Compensation and benefit costs vary significantly among various organisations depending on their revenue, size, and the amount of their benefits. This firm must assess its revenue and allocate a certain proportion for employee remuneration and benefits. We can design our plan based on this proportion, and the budget will grow according to the revenue. Regarding regulations, such as holidays and annual leaves, workers ought to receive the normal wages they earn during regular working hours. This calculation can be included in remuneration or include an hourly rate. Regarding the pension fund, companies pay the same contribution as employees at 5%. In Taiwan and many other countries around the world, pay in lieu of taking annual leave is permitted. In this scenario, an employee earns his or her salary for one working day and receives the same amount as leave payment.

The company is facing the issue of cultural diversity in the workplace. Therefore, it is prudent to ensure that the proposed compensation and benefits plan include elements typical of any rewards strategy together with a few extra allowances and incentives depending on the host country. The plan will thus, help the firm alleviate the risks associated with a collective culture that emphasizes the needs of the team as a whole over the desires and needs of each individual.

When an employee accepts an international assignment, the employer has the mandate to determine the base salary or rate of pay. In this organisation, the base rate for expatriates (PCNs) will range in the host country, Taiwan. However, the rates will be reviewed based on local variances like the proposed law enacting a minimum wage and standard benefits beginning next month. To establish base rate pays and benefits for expatriates, we can take various approaches:

  • The host-country-based approach: When using this approach, the expatriates’ compensations and benefits will depend on the prevailing national rates in Taiwan. With this approach, defined pension schemes and house allowances will be based on the local rates (Shen & Kim, 2022).
  • The home-country-based approach: The primary goal of the home-based compensation and benefits system is to equalize employees to the standards of living relished in their home country (Sharma & Sharma, 2019). If we adopt this program, employees’ base rate of pay will be divided into four categories: discretionary income, goods and services, housing, and taxes.
  • Balance sheet approach: In this approach, compensations and benefits will be determined using the home-country-based system. All reimbursements, deductions, and allowances will be considered. After calculating the net salary, it will be converted to Taiwan currency (Mane & Arora, 2018).

Since one of the primary objectives of a global compensation and benefits strategy is to main the current living standards of expatriates, designing a functional, equitable compensation and benefits plan that combines flexibility and balance is somewhat challenging for a multinational company. To this end, many multinationals approve a balance sheet approach since it enables expatriates to maintain to enjoy the same standard of living they had in their motherland. Main expenses in the host and home countries are listed on a worksheet, and any disparities are used to decrease or increase the recompense to keep it in balance. We can also allow our expatriates to divide the payment of their dues between the home country and Taiwan’s currencies. In so doing, they will receive their salaries in Taiwan’s currency for expenditures but keep a proportion in the home country currency to safeguard against adverse currency fluctuations in either country.

The recommended plans are in line with Adams’ equity theory of motivation, also called balance theory or equilibrium theory. This theory asserts that to be motivated, people want to be sure that the rewards they receive for their efforts or contributions are fair and these rewards are similar to those received by their peers (Swain, Kumlien, & Bond, 2020). In their social relationships, people are concerned with receiving fair consideration for their efforts. According to Adams, fairness is measured by the ratio of the contributions that individuals make to the rewards they receive. Based on the principle of relative equality, a person who makes a high contribution should also receive high compensation. In contrast, a person who contributes less should also be rewarded less. If a person who contributes less is rewarded more than a person who contributes a lot, then the former is over-rewarded while the latter is under-rewarded. According to Adams, under-reward, in particular, leads to negative emotions, which in turn motivate the restoration of fairness.

Adams also postulates that humans not only look at the cost-benefit ratio but also attribute a major role to social comparison. A relationship is equitable when the ratio of profits to contributions is the same for everyone. The theory postulates that when individuals perceive inequity, both under-benefited and over-benefited partners feel distressed and take steps to restore equity. Thus, Adams suggests that individuals add up their efforts and returns and then divide them. If the result is unequal to the result that his comparative partner achieves when one divides his efforts by his returns, then discomfort and dissatisfaction will arise. This dissatisfaction manifests itself both in the case of overreaching (“bad conscience”, “feelings of guilt”) and in the case of disadvantage (“feeling disadvantaged”, “frustration”), and the comparing individual then strives for balance.


Mane, P. and Arora, C., 2018. Challenges of expatriate management with special reference to compensation. Journal of Commerce and Management Thought9(3), pp.377-386.

Okeke, M.N. and Ikechukwu, I.A., 2019. Compensation management and employee performance in Nigeria. International Journal of Academic Research in Business and Social Sciences9(2), pp.384-398.

Sharma, R.C. and Sharma, I., (2019). Developing and Optimizing the Design of International Remuneration. Amity Journal of Management Amity Business School Vol. VII, No. 1

Shen, Y. and Kim, N., 2022. Successful Expatriation and Repatriation for Both Employers and Assignees: A Developmental Relationship Perspective. In HRD Perspectives on Developmental Relationships (pp. 335-365). Palgrave Macmillan, Cham.

Swain, J., Kumlien, K. and Bond, A., 2020. An experiential exercise for teaching theories of work motivation: using a game to teach equity and expectancy theories. Organization Management Journal. Vol. 17 No. 3, pp. 119-132