Wage salary administration is essentially the application of a systematic approach to the problem of ensuring that employees are paid in a logical, equitable and fair manner.
Wage: Wage and salary are often discussed in loose sense, as they are used interchangeably. But Indian Labour Organisation (ILO) defined the term wage as “the remuneration paid by the employer for the services of hourly, daily, weekly and fortnightly employees. “It also means that remuneration paid to production and maintenance or blue collar employees.
Salary: The term salary is defined as the remuneration paid to the clerical and managerial personnel employed on monthly or annual basis.This distinction between wage and salary does not seem to be valid in these days of human resources approach where all employees are treated as human resources and are viewed at par. Hence, these two terms can be used interchangeably. As such, the term wage and/or salary can be defined as the direct remuneration paid to an employee compensating his services to an organization. Salary is also known as basic pay.
Earnings: Earnings are the total amount of remuneration received by an employee during a given period. These include salary (pay), dearness allowance; house rent allowance, city compensatory allowance, other allowances, overtime payments etc.
Nominal wage: It is the wage paid or received in monetary terms. It is also known as money wage.
Real wage: Real wage is the amount of wage arrived after discounting nominal wage by the living cost. It represents the purchasing power of money wage.\
Take Home Salary: It is the amount of salary left to the employee after making authorized deductions like contribution to the provident fund, life insurance premium, income tax and other charges.
Minimum wage: It is the amount of remuneration which could meet the “normal needs of the average employee regarded as a human being living in a civilized society.” It is defined as the amount or remuneration “which may be sufficient to enable a worker to live in reasonable comfort, having regard to all obligations to which an average worker would ordinarily be subjected to”.
Statutoty Minimum Wage: It is the amount of remuneration fixed according to the provisions of the minimum wages Act, 1948.
OBJECTIVE OF WAGE AND SALARY ADMINISTRATION
The objective of wage and salary administration is numerous and sometimes conflict with each other. The important among them are:
• To acquire qualified competent personnel: Candidates decide upon their career in a particular organization mostly on the basis of the amount of remuneration the organization offers. Qualified and competent people join the best-paid organizations. As such, the organizations should aim at payment of salaries at that level, where thy can attract competent and qualified people.
• To retain the present employees: If the salary level does not compare favorable with that of other similar organizations, employees quit the present one and join other organizations. The organization must keep the wage levels at the competitive level, in order to prevent such quits.
• To secure internal and external equity: Internal equity does mean payment of similar wages for similar jobs within the organization. External equity implies payment of similar wages to similar jobs in comparable organizations.
• To ensure desired behaviour: Good rewards reinforce desired bahaviour like performance, loyalty, accepting new responsibilities and changes etc.
• To keep labour and administrative costs in line with the ability of the organization to pay.
• To protect in public as progressive employers and to comply with the wage legislations.
• To pay according to the content and difficulty of the job and in tune with the effort and merit of the employees.
• To facilitate pay roll administration of budgeting and wage and salary control.
• To simplify collective bargaining procedures and negotiations.
• To promote organization feasibility.
FACTORS AFFECTING WAGE/SALARY LEVELS
Generally, a large number of factors influence the salary levels in an organization. Significant among them are:
(i) Remuneration in Comparable Industries;
(ii) Firm’s Ability to Pay;
(iii) Cost of Living;
(iv) Productivity;
(v) Union Pressure and Strategies; and
(vi) Government Legislations.
(i) Remuneration in Comparable Industries: Prevailing rates of remuneration in comparable industries constituted an important factor in determining salary levels. The organization, in the long-run, must pay at least equal to the going rate for similar jobs in similar organization. Further, the salary rates for the similar jobs in the firms located in the same geographical region also influence the wage rate in the organization. The organization has to pay the wages equal to that paid for similar jobs in comparable industries in order to secure and retain the competent employees, to follow the directive of Courts of Law, to meet the trade union’s demands, to satisfy the employee’s need for same social status as that of same categories of employees in comparable organizations. Comparable industries constitute the organizations engaged in the same or similar activities, of the same size in the similar type or management, i.e., public sector or under the management of same owners, organizations located in the same geographical region etc.,
(ii) Firm’s Ability to Pay: One of the principal considerations that weigh with the management in fixing the salary levels is its ability to pay. But in the short-run, the influence of ability to pay may be practically nil. However, in the long-run, it is quite an influential factor. In addition, total cost of employees (salaries, allowances, cost of fringe benefits etc.) should be taken into consideration in determining the ability to pay. Trade Unions demand higher wages when the company’s financial position is sound. But they may not accept wage reduction, when the company’s financial position is in doldrums. Hence, the management has to take decisions judiciously. Further, certain incentives are linked to the profitability. Thus, whatever the influence of other factors may be, the organization cannot pay more than its ability to pay in the long-run.
(iii) Relating to Price-index: The cost of living is another important factor that influences the quantum of salary. The employees expect that their purchasing power be maintained at least at the same level, if not increased by adjusting wages to changes in cost of living. In fact, in recent years, in advanced countries, “ a number f labour agreements have ‘escalator’ clauses, providing for automatic wage and salary increase as cost of living index raises. “Dearness allowance is an allowance granted to the employees with a view to combating onslaughts of soaring prices.
(iv) Productivity: An interesting development in wage determination has been productivity standard. This is based on the fact that productivity increase is also the result of employee satisfaction and contribution to the organization. But wage productivity linkage does not appear to be so easy since many problems crop up in respect of the concept and measurement of productivity. But, although the wages are not linked directly to the productivity in an organization, changes in productivity have their impact on remuneration. This criteria received consideration of wage boards. “not only because it constituted a factor in the fixation of ‘fair wage’ but also because it was directly related to such questions as desirability of extending the system of payment by result”.
(v) Union Pressure and Strategies: the wages are also often influenced by the strength of Unions, their bargaining capacity and their strategies. Arthur M. Ross concluded that “read hourly earnings have advanced more sharply in highly organized industries than in less unionized industries. “Unions pressurize management through their collective bargaining strategies political tactics and by organizing strikes etc. trade unions influence maybe on the grounds of wages in comparable industries, firm’s financial position, raised particularly in those industries where the wage level is below that of other comparable industries”.
(vi) Government Legislations: Government legislations influence wage determination. The two important legislations which affect wage fixation are: the Payment of Wages Act, 1936 and the Minimum Wages Act, 1948. The important provisions of the Payment of Wages Act, 1936 are: ensuring proper payment of wages ad avoiding all malpractices like non-payment, underpayment, delayed and irregular payment, payment in king and under-measurement of work. The Act covers all employees drawing the wage up to Rs. 1,000 per month. The Act stipulates that the organizations with less than hundred workers should pay the wage by the seventh and the organizations with more than 100 employees should pay by the tenth of nest month.
Compensation: An Overview
●Compensation – Total of all rewards provided employees in return for services
●Direct financial compensation – Pay received in the form of wages, salaries,
bonuses, and commissions
●Indirect financial compensation – All financial rewards not included in direct
compensation
●Nonfinancial compensation – Satisfaction a person receives from job itself or
from work environment
Equity in Financial Compensation
●Equity – Fair pay treatment for employees
●External equity – Comparable salary for work performed by workers of similar
jobs in other firms.
●Internal equity – pay according to relative value of other jobs within same
organization
●Employee equity – Individuals performing similar jobs for same firm are paid
according to factors unique to employee, such as performance level or seniority
●Team equity – More productive teams are rewarded more than less productive
groups
Compensation Policies
●Pay leaders – pay higher wages and salaries
●Market rate, or going rate – pay what most employers pay for same job
●Pay followers – pay below market rate because poor financial condition or
believe they do not require highly capable employees
Job Evaluation
●Firm determines the relative value of one job in relation to another
●Ranking
●Classification
●Factor comparison
●Point
Ranking Method
●Simplest method
●Raters examine description of each job
●Jobs arranged in order according to value
Factor Comparison Method
●Mental requirements
●Skills
●Physical requirements
●Responsibilities
●Working conditions
Job Pricing
●Placing a dollar value on worth of a job
●Pay grades – Grouping of similar jobs to simplify pricing jobs
●Wage curve – Fitting of plotted points to create a smooth progression between
pay grades
●Pay ranges – Minimum and maximum pay rate with enough variance between
the two to allow for a significant pay difference
Employee –Determinant of Financial Compensation
●Performance-based Pay
●Skilled-based Pay
●Competency-based Pay
●Seniority
●Experience
●Membership in the organization
●Potential
●Political Influence
●Luck
Performance-Based Pay
●Merit pay – Pay increase given to employees based on their level of
performance as indicated in the appraisal
●Variable pay – Compensation based on performance (bonus)
●Piecework – Employees paid for each unit they produce
Skill-Based Pay
Compensates on basis of job-related skills and knowledge
●Employees and departments benefit when employees obtain additional skills
●Appropriate where work tends to be routine and less varied
●Must provide adequate training opportunities or system becomes a demotivator
Seniority
●Length of time an employee has been associated with the company, division,
department, or job
●Labor unions tend to favor seniority
Organizational Memberships
●Some components of individual financial compensation are given to employees
regardless of particular job they perform or their level of productivity
●Intended to maintain a high degree of stability in the workforce and to recognize
loyalty
Compensation for Special Groups
●Team-based Pay
●Company-wide Plans
●Compensation for Professional
●Compensation for Sales Employees
●Compensation for Contingency Workers
Company-Wide Pay
●Profit sharing – distribution of predetermined percentage of firm’s profits to
employees
●Gain sharing – incentive payment based upon improved company performance
●Scanlon plan – reward to employees for savings in labor costs resulting from
employees’ suggestions
Types of Executive Compensation
●Base salary
●Short-term (annual) incentives or bonuses
●Long-term incentives and capital appreciation plans
●Stock option plans
●Indexed stock option plans
●Executive benefits (Perks)
●Golden parachutes
Compensation Management Purpose
Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world. The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility, control and cost effectiveness.
It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies, and it empowers line managers within a framework of flexible budget control. Compensation Management allows you to control bottom-line expenditures and offer competitive and motivating remuneration, be it fixed pay, variable pay, stock options, merit increases, or promotion – in other words, total compensation.
In brief, you can use this component to perform:
_ Create centralized and decentralized budgets
_ Plan and administer compensation adjustments at the manager level
_ Plan and administer compensation adjustments within budget
_ Performing Job Pricing
_ Define pay grades and salary structures to identify the internal value of jobs and positions in your organization
_ Administer long-term incentives
BUILDING COMPENSATION PLANS
During the process of establishing compensation plans, companies take into consideration different employee types, such as a software engineer or a sales representative, and establish the primary salary ranges based on the different grades available for each position (e.g., Software Engineer I, Software Engineer II). Each position can be assigned an associated salary or compensation range, which can be further affected by other factors such as seniority, location, and market salary surveys.
Which factors are included and how much weight each factor has are easily configured during the plan definition phase. Softscape Compensation Planning includes all aspects of employee compensation, including bonuses and long-term incentives such as stock options. Compensation plan definition is extremely flexible. For instance, a plan can be applied to all employees or groups of employees, different policies in a single plan may apply to all employees or a group of employees, or an organization may cover all of its employees within one plan or within multiple plans. Plans can be tested against the organization’s budget using simulations to ensure that policies are practically applied.
MANAGERIAL COMPENSATION
There is a feeling among the trade union circles that executives get a very high salary including perks. Hence, they view that the level of executive compensation should be contained in view of the objectives of the socialistic pattern of society. However, the existing provisions of managerial compensation would provide a clear picture. Section 198 of the Companies Act, 1956 says that the total managerial remuneration payable by a public limited company to its directors, secretaries and treasures and managers in a financial year shall not exceed 11% of the net profits of the company. Section 198(4) of the Companies Act provides that in the absence or inadequacy profits, a maximum of Rs.50,000 may be paid to Managing Director and all directors. In exceptional cases, the Government may permit payment of higher salary. Section 309(4) of the Act stipulates Certain ceilings on the remuneration payable.
The Government issued guidelines in November, 1978. According to these guidelines, the overall salary was restricted to Rs. 72,000 per annum and perks were restricted to Rs.60,000 per annum. Managers and organizations were highly critical about these guidelines. They felt that they discourage initiative and hamper the skill of managers. Peter F. Durucker . who was in India during November and December, 1978, thought that such ceiling should cause migration of talent from India. He suggested that Indian managers should not accept lower salaries and they should demand tax-free as is the custom in Sweden. Ratio between the lowest and highest salary of managers in Sweden is 1:5 But the tax free benefits are enormously granted to the executives.
In view of the criticism, the Government announced some liberalization to the guidelines. Overall ceiling is as it was at Rs. 60,000 but it is increased to Rs. 62,700 in case of Mumbai. Rates of house rent allowance to salary are raised to 45% in case of Mumbai, 40% in case of Delhi, 35% in case of Kolkata and 30% in case of other places. An allowance of 10% is allowed for cooking gas, electricity, gas etc. Expenditure of pensionary benefits is increased upto 25% of the salary. Medical expenses allowance equal to three months salary is allowed. However, the Gujarat High Court in May, 1980 and the Delhi High Court in August, 1980, struck down the guidelines of November 1978 as violative of Section 637-A of the Companies Act, 1956.
The Government in U.K. accepted fair remuneration for executives in the public sector with a view to attracting whereas the Government in India reduced the managerial compensation in the private sector with a view to equalizing them with those of the public sector. Thus, the Government wishes to control its burden at the cost of talent and skill.
Influences on Compensation: Factors Determining Pay Rates 1. Job needs 2. Ability to pay 3. Cost of living 4. Prevailing rates 5. Unions 6. Productivity 7. State regulation
8. Demand and surplus of workforce
Job Evaluation:
Job evaluation is a practical technique, designed to enable trained and experienced staff to judge the size of one job relative to others. It does not directly determine pay levels, but will establish the basis for an internal ranking of jobs.
The two most common methods of job evaluation that have been used are first, whole job ranking, where jobs are taken as a whole and ranked against each other. The second method is one of awarding points for various aspects of the job. In the points system various aspects or parts of the job such as education and experience required to perform the job are assessed and a points value awarded – the higher the educational requirements of the job the higher the points scored. The most well known points scheme was introduced by Hay management consultants in 1951. This scheme evaluates job responsibilities in the light of three major factors – know how, problem solving and accountability.
Job Evaluation Methods:
There are three basic methods of job evaluation: (1) ranking, (2) classification, (3) factor comparison. While many variations of these methods exist in practice, the three basic approaches are described here.
Ranking Method: Perhaps the simplest method of job evaluation is the ranking method. According to this method, jobs are arranged from highest to lowest, in order of their value or merit to the organization. Jobs also can be arranged according to the relative difficulty in performing them. The jobs are examined as a whole rather than on the basis of important factors in the job; and the job at the top of the list has the highest value and obviously the job at the bottom of the list will have the lowest value.
Jobs are usually ranked in each department and then the department rankings are combined to develop an organizational ranking. The following table is a hypothetical illustration of ranking of jobs.
Array of Jobs according to the Ranking Method
Rank Monthly salaries
1. Accountant Rs 3,000
2. Accounts clerk Rs 1,800
3. Purchase assistant Rs 1,700
4. Machine-operator Rs 1,400
5. Typist Rs 900
6. Office boy Rs 600
The variation in payment of salaries depends on the variation of the nature of the job performed by the employees. The ranking method is simple to understand and practice and it is best suited for a small organization. Its simplicity, however, works to its disadvantage in big organizations because rankings are difficult to develop in a large, complex organization. Moreover, this kind of ranking is highly subjective in nature and may offend many employees. Therefore, a more scientific and fruitful way of job evaluation is called for.
Job Classification Method
According to this method, a predetermined number of job groups or job classes are established and jobs are assigned to these classifications. This method places groups of jobs into job classes or job grades. Separate classes may include office, clerical, managerial, personnel, etc. Following is a brief description of such a classification in an office.
(a) Class I – Executives: Further classification under this category may be Office manager, Deputy office manager, Office superintendent, Departmental supervisor, etc.
(b) Class II – Skilled workers: Under this category may come the Purchasing assistant, Cashier, Receipts clerk, etc.
(c) Class III – Semiskilled workers: Under this category may come Steno typists, Machine-operators, Switchboard operators, etc.
(d) Class IV – Semiskilled workers: This category comprises Daftaris, File clerks, Office boys, etc.
The job classification method is less subjective when compared to the earlier ranking method. The system is very easy to understand and acceptable to almost all employees without hesitation. One strong point in favor of the method is that it takes into account all the factors that a job comprises. This system can be effectively used for a variety of jobs.
The weaknesses of the job classification method are:
Even when the requirements of different jobs differ, they may be combined into a single category, depending on the status a job carries.
It is difficult to write all-inclusive descriptions of a grade.
The method oversimplifies sharp differences between different jobs and different grades. When individual job descriptions and grade descriptions do not match well, the evaluators have the tendency to classify the job using their subjective judgments.
Factor Comparison Method:
A more systematic and scientific method of job evaluation is the factor comparison method. Though it is the most complex method of all, it is consistent and appreciable. Under this method, instead of ranking complete jobs, each job is ranked according to a series of factors. These factors include mental effort, physical effort, skill needed, supervisory responsibility, working conditions and other relevant factors (for instance, know-how, problem solving abilities, accountability, etc.). Pay will be assigned in this method by comparing the weights of the factors required for each job, i.e., the present wages paid for key jobs may be divided among the factors weighed by importance (the most important factor, for instance, mental effort, receives the highest weight). In other words, wages are assigned to the job in comparison to its ranking on each job factor.
The steps involved in factor comparison method may be briefly stated thus:
Select key jobs, representing wage/salary levels across the organization. The selected jobs must represent as many departments as possible.
Find the factors in terms of which the jobs are evaluated (such as skill, mental effort, responsibility, physical effort, working conditions, etc.).
Rank the selected jobs under each factor (by each and every member of the job evaluation committee) independently.
Assign money value to each factor and determine the wage rates for each key job.
The wage rate for a job is apportioned along the identified factors.
All other jobs are compared with the list of key jobs and wage rates are determined.
Merits of Factor Comparison Method:
:
Analytical and objective.
Reliable and valid as each job is compared with all other jobs in terms of key factors.
Money values are assigned in a fair way based on an agreed rank order fixed by the job evaluation committee.
Flexible as there is no upper limitation on the rating of a factor.
Demerits of Factor Comparison Method :
Difficult to understand, explain and operate.
Its use of the same criteria to assess all jobs is questionable as jobs differ across and within organizations.
Time consuming and costly.
Point method: This method is widely used currently. Here, jobs are expressed in terms of key factors. Points are assigned to each factor after prioritizing each factor in the order of importance. The points are summed up to determine the wage rate for the job. Jobs with similar point totals are placed in similar pay grades. The procedure involved may be explained thus:
(a) Select key jobs. Identify the factors common to all the identified jobs such as skill, effort, responsibility, etc.
(b) Divide each major factor into a number of sub factors. Each sub factor is defined and expressed clearly in the order of importance, preferably along a scale.
The most frequent factors employed in point systems are:
I. Skill (key factor): Education and training required, Breadth/depth of experience required, Social skills required, Problem-solving skills, Degree of discretion/use of judgment, Creative thinking;
II. Responsibility/Accountability: Breadth of responsibility, Specialized responsibility, Complexity of the work, Degree of freedom to act, Number and nature of subordinate staff, Extent of accountability for equipment/plant, Extent of accountability for product/materials;
III. Effort: Mental demands of a job, Physical demands of a job, Degree of potential stress.
Merits of the Point Method: The point method is a superior and widely used method of evaluating jobs. It forces raters to look into all keys factors and sub-factors of a job. Point values are assigned to all factors in a systematic way, eliminating bias at every stage. It is reliable because raters using similar criteria would get more or less similar answers. “The methodology underlying the approach contributes to a minimum of rating error” (Robbins, p.361). It accounts for differences in wage rates for various jobs on the strength of job factors. Jobs may change over time, but the rating scales established under the point method remain unaffected.
Demerits of the Point Method: On the negative side, the point method is complex. Preparing a manual for various jobs, fixing values for key and sub-factors, establishing wage rates for different grades, etc., is a time consuming process. According to Decenzo and Robbins, “the key criteria must be carefully and clearly identified, degrees of factors have to be agreed upon in terms that mean the same to all rates, the weight of each criterion has to be established and point values must be assigned to degrees”. This may be too taxing, especially while evaluating managerial jobs where the nature of work (varied, complex, novel) is such that it cannot be expressed in quantifiable numbers.
Compensation Strategy
Compensation Strategy is one of the most important strategies in the HRM Function as it influences the costs of the organization and potential bad decision can lead to very serious damages to the organization.
The compensation and benefits strategy is derived from the overall HRM Strategy and it has to be fully aligned. When the HRM Strategy sets the main objectives for the HRM Function, the compensation and benefits strategy has to follow. When the overall HRM Strategy states the low cost of services and employees, the compensation and benefits strategy cannot target the highest salaries at all levels.
The compensation and benefits strategy sets the general rules for the compensation and benefits area in the organization and the owners and leaders of the area. In some organizations, the compensation and benefits department is just a support department for the line management. In other organizations the compensation and benefits manager is a very powerful employee in the organization with the right “veto”.
The compensation and benefits strategy sets the position of the organization on the job market and defines the items in the total cash in the organization and their role. The role of different components of the compensation is very important as the role of the compensation components can differ. For example, the role of bonuses can be primarily in performance reward or the retention of the employees and the organization has to decide.
The compensation and benefits strategy has to reflect the reality in the industry and the surrounding job market. The compensation strategy can set the wish to pay the lowest possible salaries, but the HRM Function and the organization have to respect the reality on the job market.
The compensation strategy needs a strong support from the top management as it sets strong limits to the daily operation of the line management and they usually do not fully agree with all the aspects included in the compensation and benefits strategy.
International Compensation:
Developing international compensation policies requires that it be consistent with overall corporate strategy, structure of a global corporation. The policy must be competitive and take into account incentives for Foreign Service, tax equalization and reimbursement of expenses. Other factors that determine whether or not the compensation package will be acceptable to the potential expatriate are social security, health and medical benefits, and cost of living factors in the foreign location. The main components of an international compensation plan are base salary, Foreign Service inducement, allowances and benefits. The base salary in domestic terms is the cash compensation, bonus and benefits are in addition to this amount. For an expatriate the base salary is a primary component of the compensation package, of which Foreign Service inducement, cost of living allowance and other costs may be a percentage of this amount.
Foreign Service inducement can vary from country to country. U.S. Department of State has published hardship post differential guidelines to determine level of payment. While the hardship guidelines may dictate a high differential cost the Cost of Living Allowance (COLA) may tend to pull this figure down. It is difficult to determine the actual cost of living in a particular country. One method to determine cost of living is according to Philippe Lasserre, Purchasing Power Parity (PPP) which is for example, a cup of coffee that cost $5.00 in New York City may cost €6.00 in France due to spot exchange rates these would be identical in cost however, the housing in Paris may be more than in New York City. To determination this can be quite extensive, housing costs must be considered, as must the cost of entertainment and food. Another cost that should be considered is education costs for children. The spouse may also decide to attend school at the foreign location to fill in any gap in the employment record she may be encountering due to her husbands foreign posting. Care should be exercised in the selection of schools both for the children and the spouse as the accreditation of the foreign school may not be acceptable in the home country. Most international schools in Europe have an acceptable accreditation in the United States.
It is also not possible to defer these payments because this creates an excess contribution and becomes a taxable event, for more information on 401k accounts please see the Internal Revenue Service web site listed in the bibliography. Another issue is the health and medical benefits and continuation of these benefits upon repatriation into the expatriate’s home country. Socialized medicine in many of the Western European countries has made this a non-issue while the expatriate is on assignment in these countries, or if an expatriate is returning to Europe after an assignment in another country. An assignment to the United States for example, the expatriate and his family would require medical insurance. There are several methods for determining the international compensation plan. The first is the going rate approach which in effect, excluding allowances and benefits discussed above, would make compensation similar to the host country nationals. This method of compensation could make things difficult for the expatriate when returning to is home country. If the going rate is considerably higher in the host country, the may be some adjustment upon his return home in there will be a perceived pay cut. The preferred method of compensation is the balance sheet method as defined by C. Reynolds as, “foreign assignees should not suffer a material loss due to their transfer, and this is accomplished via the balance sheet method of international compensation.” Taxation is also a concern to expatriate personnel. Some form of tax equalization should be provided to the expatriate employee. While on assignment for Ericsson the tax equalization was provided by withholding taxes for the parent country and paying the taxes in the host country. Centillium provided no such relief however, due to an existent tax treat between the United Kingdom and the United States my tax burden was not doubled. For further information on taxes and treaties it may benefit employers and employee to discuss their individual situations with a global accounting firm such as Ernst & Young.