For the past decade it has been pointed out that employee perspectives on and reactions to HRM should be reinstated within the relationship between HRM practices and performance, since employees are deemed critical to organizational outcomes. Furthermore, research has shown the limited effect of financial compensation practices on employee commitment and retention. The scarce theoretically grounded studies which have examined expatriate compensation have been guided by the view that financial compensation is a pivotal control and incentive mechanism, a flexible means to achieve corporate outcomes. This dissertation considers expatriate compensation from an individual perspective. It comprises four articles, of which three are based on empirical data. The first theoretical article brings to the fore the necessity of considering expatriate compensation as embedded into the employment relationship, which is itself entwined with the international environment of the expatriation. In the second article the relationship between expatriates' state of psychological contract related to their compensation package and affective commitment is investigated using quantitative empirical data. The third article examines more closely this previous relationship by considering the mediating role of perceived employer obligations. The fourth articles uses qualitative interview data to investigate, from a total reward perspective, what factors influence career decisions of global careerists. The dissertation shows that organizations would do well to encompass rewards most valued by expatriates into their compensation packages. Secondly, it shows that expatriates systematically assess their total reward package, interpret and give meaning to compensation signals in terms of fulfillment of perceived employer obligations. Simultaneously they re-adapt or adjust their attitudes at any moment through their employment relationship. Thus to retain expatriates organizations might do well to pay more attention to what expatriates value most in their employment relationship rather than simply paying them more.
Expatriate Compensation: A Total Reward Perspective