Hi!
If your company is operating or doing business in countries outside the US, the general mode of compensation payment is the local currency. However, there is no obstacle in making the US DOLLAR as a reference point for an organization's compensation scheme, esp. if the intent is to establish a certain sense of "parity" or equity.
In our international consulting business and practice, we always use the US $ as our international pricing rate. However, whenever we are paid, we do not object receiving the local currency equivalent of the agreed US $ fee for the project.
But, HR practitioners must not forget that in designing the compensation system of an organization,it must always take into consideration the basic compensation principles. In this instance, the principle of external equity (or parity with the local labor market) which is usually expressed in terms of the local currency value, must always be considered. Hence, the US $ equivalent of the local labor market median rate is the appropriate reference point. To use the US $ mainland labor market rate or even the US Head Office $ market rate is disadvantageous to the company. Only international organizations (like the UN, WB, ADB, and similar international organizations) pegged all staff salaries strictly to one international currency, like the US $, regardless of their branch/ office/ staff location around the world.
Best regards from the rainy city of Metro !
Ed Llarena, Jr.
Managing Partner
Emilla International Consulting Services
(helps improve corporate governance worldwide)