Developing a successful compensation program for the employees is one of the primary tools that multinational companies use to retain their employees as well as achieve the organization’s strategic goals through improving the employees’ work productivity. However, designing a benefits and compensation program for the expatriates is a challenging process especially due to the differences in legal and social status of the host country and the organization’s mother country. In the case of India for instance, the benefits and compensation plan for both the local employees and the expatriates is regulated by several federal and state laws. In addition, factor such as the living conditions and the need to adapt to the culture and lifestyle of the host country plays a critical role in determining the compensation package to be allocated to the expatriates. This paper, therefore, outlines the benefits and compensation plan that Coca-Cola Company should adopt in compensating the organization’s expatriates based in India. The benefits package involves the monetary incentives as well as non-monetary rewards that the company should provide for the expatriates as provided by the India’s laws and regulations. The paper also identifies some of the reasons for adopting the offered compensation package and its implications for the organization as well as the individual expats.
Monetary benefits include the regular benefits to the expatriates in form of solid or liquid money in addition to the normal basic salary. Some of the advantages in this package include lump-sum bonuses especially to the sales manager as provided by the Payment of Bonus Act 1965 (Deshpande, 1992). Paid leaves are also an essential benefits plan provided to all the employees working in Indian-based organizations. Some key paid leaves include sick leaves, emergency or casual leave and federal leaves and the employee’s annual leave. Other than the bonuses and paid leave, an expatriate is also entitled to the cost of living allowance, medical insurance cover for the expatriate and his/her family and housing allowance to cater for the expensive living condition in India.
An expatriate working in India is also entitled to fringe and retirement benefits package both provident funds and gratuity which guarantees the employees’ 15-day salary after the retirement. Coca-Cola Company should also be willing to provide short-term and long-term loans upon request by the expatriates especially in matters concerning family support and development.
Providing non-monetary incentives play a crucial role in retaining and influencing the employees as well as motivating them to work hard towards achieving the organization’s strategic goals. With the corporate culture of “One Company, One Team One Passion”, Coca-Cola Company provides equal non-monetary benefits to all the employees including training, pension schemes, paid trips and company vehicles to the top management. Training the expatriate is an essential non-monetary plan that guarantees job productivity by equipping the individuals with skills other than the ones they learned from their respective colleges (Merchant, 2006). The plan should involve orientation of the new expat on the various operation of the organization including the working hours, inter-departmental relations and the organization structure. In addition, Coca-Cola Company has a mandate of paying for the expatriate training program on the matters of culture and language. According to Budhwar and Khatri (2001), India has a reserved culture in terms of greetings, work relations, dressing and other cultural practices that should be observed by everyone. Thus, an expatriate and the rest of the family should learn the basic cultural etiquette and the local language so as to be able to adapt quickly relate and communicate effectively with the community members, employees and other managers.
Other non-monetary benefits that Coca-Cola provides include issuing the expatriate with recognition incentives such as trophies, certificate of participation, medals and branded items such as t-shirts is essential in creating job satisfaction. This is because the expat will have something to show to the people concerning personal achievements while working abroad as well as “enhance personal brands” as Dewhurst et al. (2012) notes.
Importance of the benefits program
Expatriates compensation program plays a vital role in ensuring that the expatriates adapt quickly to the new working environment by having the assurance that their needs are catered for in a satisfactory manner. In addition, a satisfactory benefits plan improves the employees’ working motivation, thus helping the company achieve the set strategic goals. For instance, for Coca-Cola Company to achieve a market leadership goal in the Asian market, they must have motivated managers and expatriates who are mandated with the responsibility of leading the employees towards achieving this objective.
Coca-Cola Company has played a vital role in motivating and influencing their employees in the international market as a strategy for achieving the organization’s strategic goals. The benefits plan that includes the provision of both monetary and non-monetary benefits to the expatriates in Coca-Cola India has enabled the company to thrive amidst the challenges of cultural diversity. Regardless of the efforts to provide competitive compensation and reward package, Coca-Cola Company has a task of ensuring that the expatriates receive adequate cultural training as a way of reducing conflicts at workplace. This is especially in terms of socializing and accepting gifts from the local employees who have conserved culture compared to the culture found in the expatriates’ mother country.
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