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Experiential Activity. As domestic companies begin to expand overseas, they face many challenges. Among these is deciding how to compensate the people who fill management positions in the global operations. Two basic alternatives to paying the people who fill top management positions in a firms global operations are (1) pay managers located outside the United States an amount that matches the total compensation of local executives in the non-US- locations or (2) pay managers located outside the United States an amount that matches the total compensation of their US. counterparts.

For this activity, imagine you work at Glow Ball a U.S. toy company with operations in Iceland India Indonesia Ireland and Italy. The company is growing rapidly and plans to send some US. managers to gain experience in the non-U.S. locations.

You have been asked to help the company develop its pay plan for the managers who will be sent abroad.

9. First using Table 9.1 make a list of the pros and cons of Option 1 and Option 2.
   What HR objectives might best be achieved by each approach?
10. Next- choose your preferred approach. Do you think Option 1 or Option 2 is the better way to pay managers?

My preferred approach would be to pay to match the local executives, Option 1. You have to consider the economic, ethical, and cultural situations of every country. An example of this would be a tech guru living in San Francisco. He would command a large salary based on his expertise as well as the hefty cost of living for San Francisco. On the other hand, you have a tech guru living in a less expensive country in central Asia. You would pay him a livable wage based on the market he is living in.

1. Finally, assume Glow Ball company adopted your preferred approach a year ago.
   Now there are a total of 50 American expatriates working in the five countries listed above It is time to evaluate whether your total compensation approach was the right choice you have been put in charge of the evaluation project. You must develop a list of interview questions to ask all of the company’s American managers working abroad. What three (3) questions will you ask these 50 people in order to evaluate the effectiveness of their total compensation and explain the logic that guided you in developing it.