International Compensation Practices • 45 INTERNATIONAL COMPENSATION PRACTICES: A TEN-COUNTRY COMPARATIVE ANALYSIS Human Resource Management, Spring 2002, Vol. 41, No. 1, Pp. 45–66 © 2002 Wiley Periodicals, Inc. This article published online in Wiley InterScience (www. interscience.wiley.com). DOI: 10.1002/hrm.10019 Kevin B. Lowe, John Milliman, Helen De Cieri, and Peter J. Dowling This article presents a comparative study of compensation, by exploring nine items which mea- sure pay and benefits practices in ten locations (nine countries and one region). First, similarities and differences in employee compensation are examined. Second, emerging issues for interna- tional compensation are identified. Third, gaps are identified between current practice and employee preferences for future compensation. Overall, the results of this study provide some support for previous research, although a number of counterintuitive findings are identified with respect to the ways in which culture might be expected to impact employee preferences for cross- cultural compensation practices. The research suggests several challenges for compensation practice and directions for future research. © 2002 Wiley Periodicals, Inc. Introduction The escalating pace of globalization is increas- ing the need for organizations to develop ef- fective international compensation programs. Though globalization is not a new phenom- enon, it is the rapid pace of escalation that has focused attention on international issues in both the business press and the executive suite. In these turbulent and increasingly glo- bal competitive markets, no function is under greater scrutiny than the human resource function (Bowker, 1996). Despite the need to attract, motivate, and retain an effective workforce in a variety of foreign locations, the international compensation literature has fo- cused primarily on a small percentage of the international workforce: the expatriate man- ager. It is important that international com- pensation scholars begin to extend this focus beyond the expatriate to inform organizations regarding the cross-cultural use and motiva- tional utility of various compensation practices on the larger workforce. The Purpose of This Article The purpose of this article is to explore the role of pay and benefits in international com- pensation from an empirical perspective. This ten-country/region study is exploratory in na- ture and has three primary objectives. First, to determine what “is now” the current state of practice for a variety of compensation prac- tices (what are the similarities and differences evident in employee compensation in differ- ent countries?). Second, to determine to what extent managers feel these compensation prac- tices “should be” utilized in these countries (what constitutes the current ideal in com- pensation practice?). Third, to identify the gap between what “is now” the state of practice