This exercise forces students to think realistically about the compensation problems with expatriate employees. The rankings will vary, but students should be prepared to defend their rankings with reason and logic. Similarly, although the described “effects on compensation” may vary, they should be reasonable and logical. When discussing the problems that the higher level of compensation might create, do not forget:

(1) Jealousy of other employees.

(2) Problems of adjustment when repatriation occurs.

(3) Whether even this level will be adequate to entice employees to take the foreign assignments.