An Integrative Approach to International Compensation: Meeting Emerging Challenges

This paper is a response to several recent developments; the emergence of SIHRM; indications that Australian organizations are entering cooperative or collaborative international arrangements with international organizations; evidence of enduring traditional models of compensation for expatriate management in Australian organizations (Arthur Andersen, 1992, 1994, 1995) and anecdotal and empirical evidence of enduring problems with international compensation management (Harvey, 1993a). As organizations move from traditional to new forms of internationalization, SIHRM policies and activities, including compensation, will need to reflect these new forms (Hendry, 1994). Are these changes occurring in Australian organizations? Existing evidence suggests SIHRM policies and activities may be lagging. The paper attempts to integrate secondary data and previous research, and represents the preliminary stage of our research agenda. The focus is on the implications of international collaborative organizational forms for compensation management. A conceptual framework is presented, which aims to facilitate understanding and application of international compensation policy and practice in the context of factors endogenous and exogenous to the MNE.