1. For a company with operations in a “difficult country,” what would be the advantages of hiring manager from that country? What would be the disadvantages?
2. What would be the advantages of sending managers from headquarters to lead the operations in the “difficult country”? What would be the advantages?
3. Suppose you work in HR for a company that needs to cut costs and is considering the elimination of hardship pay for managers sent to work in a “difficult country” where the company has an important facility. How can you measure whether the hardship pay is a worthwhile expense? Write a one-paragraph recommendation of how you think the company should handle the issue of hardship pay.

During hard times, a tempting target for cost cutters at multinational corporations might be hardship payments. Multinationals for years have paid these bonuses to managers who accept overseas assignments in difficult countries, usually in developing nations in Asia, Africa, Latin America, and the Middle East. Companies have calculated that, in order to have talented people in key locations, they need to sweeten the terms, with payments ranging from 5 percent to 30 percent of a manager’s salary.
Despite the need to cut costs now, executives at the consultants that help companies calculate hardship bonuses argue companies are still going to pay managers extra for taking difficult posts. Cathy Loose, Asia-Pacific mobility leader for Mercer, the HR consulting firm that is part of the New York–based Marsh & McLennan Companies, expects demand for hardship payments to go up. “As companies expand into emerging markets, hardship allowances are actually still relevant,” she says.