Assignment Topic: Select any two real-world business organisations, and critically analyse the compensation package provided to their expatriates. Analyse the suitability of the compensation package...

COMPENSATION APPROACHES OF PEPSI AND COCA-COLA
Table of Contents
Introduction    3
Compensation approach in Pepsi    3
Use of specific compensation approach    3
Reason of compensation approach    4
Impact of compensation approach    5
Compensation approach of Coca Cola    5
Use of compensation approach    5
The reason behind the compensation approach    6
Impacts of compensation approach    7
Conclusion    8
References    9
Introduction
The report consists of the compensation approaches of two of the world's leading business organizations Pepsi and Coca-Cola. The compensation approach is a type of business approach that determines the international compensation package. Currently, there are three different packages of such that include going rate approach, balance sheet approach, and local plus approach. The use of the approaches helps in understanding the rates of compensation given by the company to its consumers and employees in order to simplify the general rates of the products or services given by the company. Due to globalization, global businesses are expanded in different parts of the world and there are certain rates of the products that can be manipulated by compensating it with the regional price. In the going rate approach, local market rates are taken based on the surveys of the product in both local and international markets.
On the other hand, the balance sheet approach measures the international compensation system that equalizes the purchasing power of the consumers in both the regional and international areas. Therefore, these two approaches create a balance between the national and international positions of the product or service given by the company. Under the balance sheet approach, employees stay on similar payroll in the home country and enjoy benefits generated by the company (Kitur, 2021). That is why the local plus approach is becoming more popular because employees receive a salary scale of a host-country standard that can be quite beneficial in terms of the overall compensation that the person is receiving. The report will discuss the policies of the company based on the approaches.
Compensation Approach of Pepsi
Use Of Specific Compensation Approach
Compensation management is a practice that is initiated by many companies around the world and the Global Business companies like Pepsi runs the management process quite successfully in their business organisation. It is one of the key points and acts as a motivating factor for the employees to perform well in such organisations where an effective compensation management system can contribute to the high production of the business (Adeoye, 2019). On the other hand, failure of compensation management in the workforce can create employee dissatisfaction and increment in grievances that can reflect positively on the job performance of the employees in this business organisation.
That is why it is necessary for companies like PepsiCo to create a contemporary business environment with better compensation practices and PepsiCo is designed to have a fixed income for the employees of the organisation where strategies like a base salary and annual incentive compensations are related. In that case, it can be said that PepsiCo uses a balance sheet approach compensation where employees working in this organisation are given a basic salary that is reviewed regularly on a certain period and it is benchmarked based on competition in a similar market group (Reddy & Medipally, 2017). The additional incentives on an annual basis depending upon the performance rate of the employees. Strategic position, financial results, and overall strategies are considered for providing compensation for the employees.
Reason Of Compensation Approach
PepsiCo believes in a compensation strategy for the employees in order to influence them for better performance and they also try to reward the employees for their achievements. Coca-Cola believes that rewarding the employees according to their performances and years of experience will help them to generate trust for the company and it will reflect positively on their overall performance that will reflect on their productivity towards the company. This way the company can retain its best employees and correct their underperformance is by influencing them to perform better. Various researches and scholarly journals have proved that the compensation approaches have retained the best employees of the company and they have been quite beneficial for the overall development of the company to thrive in many international locations. As per Bishnoi and Poonam, these strategies work best while retaining an employee in different parts of the world where it is necessary for the company to give credit to their employees...