PAYING EMPLOYEES TO RELOCATE Cardinal and on approach When Google wants to transfer an employee from its Washington, D.C., office to its London branch, it must decide how much compensation to offer the worker to move. International firms are increasingly relocating workers throughout their home countries and internationally. As you might expect, workers are not always enthusiastic about being relocated. In a survey by Runzheimer International, 79% of firms' relocation managers responded that they experienced resistance from employees who were asked to relocate to high-cost locations. A survey of some of their employees found that 81% objected to moving because of fear of a lowered standard of living One possible approach to enticing employees to relocate is for the firm to determine the goods and services consumed by employees in the original location and then pay those employees enough to allow them to consume essentially the same items in the new location. According to a survey by Mercer, 79% of international firms reported that they provided their workers with enough income abroad to maintain their home lifestyle. However, economists who advise on compensation packages point out that such an approach will typically overcompensate employees by paying them more than they need to obtain the same level of economic well-being they have in the original city. How can a firm's human resources (HR) manager use consumer theory to optimally compensate employees who are transferred to other cities