International compensation Essay

2681 WordsApr 21, 200911 Pages
Budget Rent-A-Car and International Compensation 1. Description of the case Morris Mirkin founded Budget Rent-a-Car Corporation in 1958 in a Los Angeles storefront with an initial investment of $10,000. He began renting Chevrolets at $4 a day and $.04 a mile. Budget began international operations when it opened stores in Canada and Puerto Rico in the mid- 1960’s. Expansion into Great Britain occurred a few years later. In 1993, Budget Rent-a-Car was the third largest company in the car rental industry with over 3,200 locations worldwide and sales of $2.4 billion in 1992. Today, Budget offers 160,000 vehicles for rent worldwide. (www.budget.com) This case focuses on Budget Rent-a-Car initiating an incentive plan that would be viable both in the United States and France. Corporate vice president of training and compensation, Jack McEnery, and vice president of human resources for Europe, the Middle East, and Africa, Sylvia McGeachie, felt that they had developed a well thought out design. This plan was being put in place to reach at least 70 percent of the corporate goals regarding profitability. If this was to happen there would be a payout to all exempt employees. The compensation would not affect base pay. It was to be based on regional profit and the salary grade of each exempt employee. For example, a manager could receive 25 percent of their salary at year’s end and another 25 percent after 3 years. These rates would increase in respect to changes in an employee’s position and salary level. They were planning to implement the plan soon. McEnery and McGeachie had little in way of reference, due to the fact that not many companies had implemented international incentive programs. As they discussed this new plan they realized that there were major differences between the US and France. In 1967, France enacted a mandatory profit sharing

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