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  5. Compensation and Benefit Design: Applying Finance and Accounting Principles to Global Human Resource Management Systems, (paperback)

Compensation and Benefit Design: Applying Finance and Accounting Principles to Global Human Resource Management Systems, (paperback), 1st edition

  • Bashker D. Biswas

Published by Pearson FT Press (August 18th 2015) - Copyright © 2013

1st edition

Compensation and Benefit Design: Applying Finance and Accounting Principles to Global Human Resource Management Systems, (paperback)

ISBN-13: 9780134385891

Includes: Paperback
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What's included

  • Paperback

    You'll get a bound printed text.


The definitive HR professional’s guide to designing highly effective compensation and benefit programs


• Best-fit practices and financial/accounting techniques for aligning compensation and benefits with corporate objectives


• How to quantify and optimize the business value of compensation and benefits programs


• Key concepts explained with various examples


This guide will help HR professionals bring true financial and accounting discipline to compensation and benefit design, tightly align talent management to strategy, and quantify program performance in the language of finance.


Leading educator and consultant Bashker D. Biswas brings together information that is rarely presented coherently, and almost never presented in non-financial texts. He thoroughly explains best-fit practices for superior program design, demystifies relevant financial and accounting concepts, and illuminates key connections between HR program development and GAAP/IFRS accounting requirements.


This guide’s far-reaching coverage ranges from integrating compensation and benefits into Balanced Scorecards to managing expatriate compensation. Biswas reveals the true financial implications of every element of modern compensation and benefit programs, from base salaries to stock incentives, from sales compensation to healthcare cost  containment. Perhaps most important of all, he helps you systematically measure the value of your investments—so you can both prove and improve your performance.

Table of contents


Part 1

Chapter 1 Introduction: Setting the Stage     3

The Cost Versus Expense Conundrum     4

CAPEX Versus OPEX     7

The Current HR Cost-Classification Structure     8

The Current Accounting for Compensation and Benefit Cost Elements     12

Key Concepts in This Chapter     23

Appendix: The Terms     24

Chapter 2 Business, Financial, and Human Resource Planning     29

The Overall Planning Framework     30

HR Planning     34

HR Programs     43

Key Concepts in This Chapter     52

Appendix     53

Chapter 3 Projecting Base Compensation Costs     55

Base Salary Costs     58

Key Concepts in This Chapter     67

Appendix: Cash Flow Impact of Salary Increases     67

Chapter 4 Incentive Compensation     71

An Introduction to Incentive Compensation Programs     71

Accounting for Annual Cash Incentive Plans     74

Key Incentive Compensation Metrics     77

Free Cash Flow as an Incentive Plan Metric     81

Economic Value Added as an Incentive Plan Metric     82

Residual Income as an Incentive Compensation Plan Metric     86

The Balanced Scorecard and Incentive Compensation     87

Balanced Scorecard and Compensation     92

Key Concepts in This Chapter     94

Chapter 5 Share-Based Compensation Plans     95

Stock Award Plans     97

Stock Option Plans     100

Stock Option Expensing     103

The Accounting for Stock Options     106

Tax Implications of Stock Plans     112

International Tax Implications of Share-Based Employee Compensation Plans     116

Employee Share Purchase Plans     121

Stock Appreciation Rights     122

Key Concepts in This Chapter     126

Appendix: Stock Options and Earnings per Share     127

Chapter 6 International and Expatriate Compensation     131

The Background to International and Expatriate Compensation     132

The Balance Sheet System     136

Expatriate Taxes     143

The Cost-Differential Allowance     151

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