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Analysis of International Pay Systems

An expatriate can be explained as an employee of a business who's a citizen of the company s base country but does not work in his or her native country. In cases like this Riordan can be an American company that is expanding to Japan. It will need to employ employees to work in its firm in Japan. If Robert lord was to move to work in Japan he would be an expatriate. Taking into consideration that his expatriate's pay would include housing, healthcare, transportation, allowances and premiums, his pay would differ from the pay of an Japanese national of the same age. It is because there are elements that are tied to an expatriates pay. This has been discussed below.

After moving from the united states to Japan Robert lord would want most of new things. These include furniture, the company must appeal to him to learn the new language in Japan and also he must learn the Japanese culture. The company has to appeal to all this and it can be done through his salary. Robert will also have to find a school for his children if he's taking them with him plus the company must appeal to spousal employee assistance. Each one of these can be subdivided into four parts salary, taxes, housing and allowances.


His base salary will be including incentives. A motivation is important since Robert is required to move from his country to a foreign country. Incentives is definitely an additional payment (or other remuneration) to Robert as a way to get him to go to Japan. In addition, it acts as a positive motivational influence. His base salary depends upon evaluating of the same job in his home country. Thus his salary will never be determined by japan system, it will be dependant on the salary of his home country. In the bid not to disrupt the output of Robert the company will have to maintain his living standards. The company must maintain his living standards close or above that of Robert s peers at home. Because the economy of Japan is not the same as the American economy it would lead to hefty packages paid to Robert by the business.


Income earned by Robert will have two sources of tax. He will be taxed by the American government and also by the Japanese government. His pay will be at the mercy of taxation in Japan and back unlike a Japanese of the same age who's being taxed only by japan government. Riordan must take responsibility to pay either or both the taxes being levied upon Robert. The business will be required to pay whatever taxes that are above what Robert was paying in his home country.

House allowance

Riordan has to appeal to housing Robert in Japan. The company will be forced to pay house allowances or provide company owned housing for Robert. The company will be required to maintain Roberts s standard of living. Therefore this mean his allowance may increase since the cost of housing in Japan is greater than that of Japan

Allowances and premiums

The company will have to cater for further expenses by offering more allowance. These allowances can include transport allowance since Robert must get to work and back home, club memberships, child care and education, spousal employment, local culture training, and personal security. These allowances are important since Robert will be working under less direct supervision as compared to a domestic counterpart. Since Robert will be new to Japan he will often live and work in strange and sometimes unsecure surroundings thus he needs more security. It is important for him to review Japan s language and culture since he'll be representing the employer in the host country. The amount of the allowances and premiums can vary greatly due to hazards and hardships of the host country.

Roberts pay differs since the Base pay of an Japanese worker the same age as Robert accounts for 60 to 80 percent of an employee s monthly pay. The base pay of your Japanese worker will depend on the worker s rank in the business. Unlike America base pay in Japan is not predicated on job evaluation or market pricing nor is it attached to specific job titles. Rather, it is dependant on a combo of employee characteristics: career category, many years of service, and skill and performance degree of the employee. Which means that he'll be paid more that his Japanese counterpart.

This pay is equitable: This is because:

Robert is a long way away from home and it is not used to Japan

Robert will be working under less direct supervision as compared to a domestic counterpart therefore he's entitled to an improved pay.

Since Robert will be not used to Japan he will most likely live and work in strange and sometimes unsecure surroundings thus he needs more security thus more pay.

It is very important to him to review Japan s language and culture since he will be representing the employer in the host country. Thus the employer must cater for him to sturdy.

Robert might face hardships while in Japan thus the pay is justified.

If he was relocated back again to the united states his pay would differ from the pay he gets in Japan because the pay system in Japan and this in America are different. These distinctions are discussed below.

The Japanese national pay system differs from the American system of payment japan system of pay looks mostly at the talent of the employee, his seniority at the organization. It isn't pegged on employee performance alone. Its job promotions are majorly decided after the trainability of a worker. The system targets long term commitment to the business. The companies in Japan have long term focus.

The US system has short term focus and goals and a performance that is intended for market dynamics. Performance dynamics in Japan are not market manipulated but derive from the inner organization of the business. In Japan cashflow is controlled with financial bonuses within the US cost control of the business varies with performance of employees. You can find no bonuses in america system. In Japan as discussed earlier the pay of an employee is dependant on ones position in the company, ability, talent and their age.

In the US pay is based on the sort of work that the employee does. JAPAN system has lots of levels in their organizations. It offers lots of ranks at the work place as the us based system has a few ranks and larger pay distinctions from minimal paid to the most paid. In Japan the difference between your highest and lowest paid is minimal. In Japan the system is in a way that companies compare pay of similar employees from their opponents and base the pay of their employees on the pay of the competitors. This may be geared towards the retention of talent in the company. In america the competitor s pay will not determine an employees pay.

An employee s pay depends upon market dynamics and the employee s performance at the company. In Japan the as it pertains to bonuses they are really continuous at lower levels and vary only at the higher levels. Promotion is dependant on the performance of an employee. The main disadvantage of promotions in Japan is the amount of levels. Promotion involves a little pay increase. In the US system employee bonuses aren't constant. Bonuses are varying and depend on the employee s performance and pay. Bonuses and performance appraisals decrease and increase depending on the employees and companies performance. The advantage of the Japanese system is so it supports commitment and job security. You are secure and happy at their work place. It is also advantageous since they have long-term objectives and goals.

The benefit of the US system is which it supports performance of employees. It really is market driven therefore organizations can be flexible and are consumer driven. Concentrate on the marketplace has great profits. The disadvantage of japan system is that this discourages employee contribution and it discourages the low level employees of the organization. The US system lacks job security due to its short term goals. There is absolutely no reward in buying permanent goals.

Trade unions and employee involvement

In Japan the unionization rate is approximately 24 percent. Any employee below the section head job rank may become a union officer in Japan. The trade unions in Japan enjoy a close and unstrained relationship with the employers. Employees from companies are automated members of trade unions. Members of the management of the company cannot join trade unions.

The work and aftereffect of trade unions is to champion for better pay and work conditions for employees. The trade unions discuss with employers so as to better the pay and benefits for employees. Trade unions also actively engage the federal government in a bid to fight for the increase of wages and salaries of citizens employed by the federal government. Trade unions often organize strikes and demonstrations when there's a problem in the rights of employees. If companies try to downsize the number of employee s trade unions often protect the rights of these employees. In addition they fight for better working conditions for employees. Trade unions also comprise of the social contract in Japan

The social contract

A social contract can be defined as an agreement between people of a certain society to give up their liberty to a government or a business in return for security and protection of these liberty. The social contract in Japan is in charge of setting up a good relationship between an employee and an employer. The social contract brings harmony to all or any major players in the employment sector. It brings together the employer, employee, the federal government of Japan and trade unions. The social contract comprises the expectations and interaction of most this elements in Japan. The social contract creates an understanding about how exactly employees are paid in Japan. It can help employers in managing and understanding employee compensation in Japan. The social contract in Japan spells out the rules to consumer and market response, production of quality goods and services

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