 In this topic, we are going to talk about the third approach to international compensation which is called the local plus approach. It is something which is emerged as a new concept, which is basically because of the increasing rate of globalization and many companies opening up in different parts of the wall. Earlier, the basic model was that they were US multinationals and they used to open their subsidiaries in other parts of the world or European organizations, most of it. But now that there are many Asian, Asia Pacific region companies which are globally expanding, so they cannot go according to either the going rate approach or the balance sheet approach. So this is a combination of the going rate approach as well as the balance sheet approach which takes into account both the local challenges as well as the global challenges which are attached with compensating people in that particular location and according to the strategy of the organization. So this is called the local plus approach. So now let's take a look what the local plus approach, what are the elements of that. In the local plus approach, the expatriate employee is paid according to prevailing salary levels, structure and administrative guidelines of the home country. Basically, the person is paid according to the salary structure and the administrative guidelines of the home country which is the parent country. Plus, you can see that I've made a bold plus in that. Plus the expatriate type of benefits in recognition of the foreign status. So it is not something which will follow the going rate approach completely. That the market's rate is going to be employed at the subsidiary level or it's not going to follow the balance sheet approach completely. That the compensation packages on the home country are applied to them as it is in the local context. In fact, you will take a combination of both of these. In case you will keep your home salary and compensation packages, but the challenges of foreign location and foreign assignment and the requirements of that, you will adjust them somehow in your compensation package. And those are going to be the expatriate type benefits which may be in the form of foreign inducement allowance or in the form of hardship allowance or in the form of other types of allowances and benefits. But it is going to be a combination of both the global requirements and the local requirements. And this is something which we are trying to achieve in the international human resource management context throughout all the processes. It's not just limited to compensation. When we talked about other aspects, we have discussed that there has to be a combination of being global as well as acting local. And that is something which is being applied to the international compensation context in the form of this local plus approach of compensation packages. So this is a combination of both the two elements. It does not usually, it typically does not include the cost of living allowance, mobility premiums, hardship allowances, similarization visits, home leave, cross-cultural training and other pre-departure or spouse assistance allowances. It is not as in the traditional approaches to the going rate approach and balance sheet approach. These allowances are given so explicitly in the local plus approach. They are not actually addressed in this way. They are actually made a part of the compensation as a general following of the psychological contract of the employee with the organization and such type of differentiated benefits. They are not paid in the local plus approach. Basically the home country structure is followed and then there are some expatriate type benefits which are included in that compensation package. But it is something which is more of an organic nature, less structured, less mechanistic, more, it is something which is more flexible to the environment, more flexible to the changing environment and something which is more fluid in nature and not something which is predefined as a a priori hypothesis. Okay, this is the way, this is the approach that we are going to take. And these are the different allowances and sets of payments that we are going to make to the person. It is going to be according to the requirement of the organization, the requirement which is the strategy of the organization and the local context is also going to be taken into account. So this is basically the spirit of the local plus approach that it is an organic fluid way of compensating the employees which actually which calculates the amount of payment which is required to be paid. Not that you need to follow some approach, but what is the requirement and what is the psychological contract of the employee who is working for you, how much that person would need to be compensated for and in what ways that compensation needs to be done. So this is basically the approach of local plus approach of compensation packages in international context.