European Hotels Plc owns 10 hotel chains across Europe. They recently acquired a small hotel chain operating in Jamaica. The acquisition of a small hotel supports European Hotels strategic objective of growing the organization but ensuring that new ventures are well supported, opened on time and within budget.

European Hotels Plc is considered a budget accommodation; they are functional, clean and reasonably priced. Most guests stay for one to three nights and are a combination of leisure and business travellers. The hotels are typically situated in European locations that are easily accessible by ground transportation. They follow the bed and breakfast model of hospitality.

The organization has decided to use a modified ethnocentric approach and send some of their existing European-based managers to Jamaica to lead the changeover of the new hotels and then manage them after they re-open. If this new overseas venture is successful, European Hotels may decide to acquire other small hotel groups in other Caribbean countries. The organization would like to own four hotel chains in the next five years. Their 10-year plan is to own eight chains across the Caribbean. This is an ambitious target, so it is important that the organization finds an effective formula to operate successfully in the Caribbean.

The organization has never hired managers to work outside Europe and thus, the owners do not know how to start determining the compensation and training needs. However, they do know that:

The existing average salary for managers in Europe is 53,000 Euros plus bonuses.

Surveys show that the average salary for hotel managers in Jamaica is 45,000 Euros with no opportunity to earn bonuses.

European Hotels Plc current pays management staff an average of 55,000 Euros, with the opportunity for bonuses and commission.

The owners want to have a consistent approach as to how they compensate expatriates because they expect their overseas business to expand in the future. They also want existing employees to be enticed into working abroad and know that they will need to have a good range of incentives.

Modified from 2008 Society for Human Resource Management. Fiona L. Robson-Brunt

(Adapted from CIA World Factbook and PKF Business Advisors)

3. Using the table below, list eight (8) international compensation components that will address the transition, on location and other needs that such expatriates will need, each area MUST have at least two (2) components to receive full marks. Using the table TRANSITION ON LOCATION OTHER