The answer is unclear. Administrative costs are very high, employees do not recognize or properly value benefits and little is done to effectively communicate the worth of benefits. On the other hand, few employees would give up their benefits and most are reluctant to take jobs that do not include benefits. Decisions about the structure of the compensation function help decide who has responsibility for design and administration of various aspects of the pay systems. A decentralized structure pushes responsibilities and expenses closer to the units and managers affected by them.
Centralization locates responsibility in a single corporate unit, which helps ensure consistency.
Whatever structure is adapted should be compatible with other organization structures as well as the objectives the organization is trying to achieve. You are a human resources manager charged with creating a compensation package for a top marketing manager who will be going overseas on assignment to Brazil. Here you can discuss many of the compensation components presented by Marny Prillwitz and Donna Lettier. You might want to focus on issues of ensuring safety of the individual and her family, providing for language and culture training, and maintaining her standard of living. Because they have traditionally sought to maintain living standards as well as provide an inducement for employees to live in foreign countries, expatriate compensation has been very expensive.