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The role of compensation in organizational behavior is an important one as it is used as a key tool by management to achieve social control over its employees (Pfeffer, 1997, p.102), the primary assumption being that compensation packages affect attitudes and behavior. This is seen as particularly true of executive level compensation on the grounds that management must be sufficiently motivated if organizational objectives are to be met and so that, they in turn, succeed in motivating the rest of the organization: "Because of the importance of money as a motivational factor, the compensation function is quite significant. Its performance involves developing a philosophy of what wages should be; developing theories as to the source of wages...relating compensation to individual jobs; arriving at individual differentials in pay...." (Megginson, 1972, p. 50)
Though compensation may undeniably be an important factor, several research studies have shown that the role of…
Hopkins, W.E., Mallette, P., & Middlemist, R.D. (1995). "Social, Political and Economic
Determinants of Chief Executive Compensation." Journal of Managerial Issues. Vol. 7:3, p. 253+
Megginson, L.C. (1972). "Personnel: A Behavioral Approach to Administration."
Homewood, IL: R.D. Irwin.
In order to compare the executive compensation in both countries, the countries firms should be matched and compared according to industry, size and operation. The executive compensation can be measured or compared accurately according to the industry and firms sizes. From the data, it was found that the executive compensation in both countries were high whereas the firm performance was reducing. The data collection for the executive compensation in both countries provides the detail information on the executive salary. Executive compensation can be divided into four main categories such as salary, bonus, benefits and long-term incentive plans. These benefits include the incentives like medical, life insurance, pension allowances plan and many other incentives. Bonuses and benefits are the short-term compensation and these are the part of the salary packages. The components of long-term incentive plans are the stocks and shares. The long-term incentive plans or the stock base compensation is…
Frydman, Carola and Saks.E.Raven. " Executive Compensation: A New View for Long
Term Perspetive," 6 July 2007. Web. 23 June 2012.
Jiang, Weiwei. "Ownership Structure and Executive Compensation in Canadian
Corporations," University of Saskatchwan, Canada, April 2011. Web. 21 June 2012.
Those days are likely over, for a variety of reasons, including shareholder concerns about the ever increasing dilution due to the issuance of options and new accounting rules requiring companies to expense options... In addition, studies have shown that the accounting cost of stock options exceeds employees' perceived value of those options. Finally, there has been a crisis in governance that has caused a reexamination of corporate accounting standards. No wonder some feel that stock options are dead in the water."
Compensation committees are now facing serious challenges. It is the job of the committee to have a valid, sound and sensible pay philosophy in order to determine compensation that best suits the company policy and shareholders interests: "...compensation committees must decide how to use a company's pay philosophy to best advance its overall business principles and goals."
Stakeholders are now expecting compensation to be closely tied with performance because…
Young Baek, Jose a. Pagan. Executive Compensation and Corporate Production Efficiency: A Stochastic Frontier Approach. Contributors: Quarterly Journal of Business and Economics. Volume: 41. 2002. 27+.
Use Best Practices in Executive Compensation Plans. Journal of Accountancy. Volume: 193. Issue: 6. 2002. 22.
Shamsud D. Chowdhury, Eric Wang. CEO compensation: Turning conventional wisdom on its head (almost Ivey Business Journal Online London: Nov/Dec 2004. p. D1
Randy Myers. Why compensation committees need your help Journal of Accountancy New York: Dec 2002. Vol. 194, Iss.6, p. 65-71 (7 pp.)
This talent does need to be retained.
ith respect to the executives who were involved in mortgage-backed securities, however, this argument holds little water. These are not talented individuals, as demonstrated by the substantial losses their actions have inflicted upon the company. They are not the sort of employees that the firm should be seeking to retain. It is only due to the outdated or erroneous perception that these individuals cannot be replaced that they are still valued at all.
Eventually, shareholders will acquire more direct control over executive compensation. Until that time, however, the distortions in the market will still exist, as long as the perception of scarcity of talent persists. As more shareholders re-align executive compensation with long-term results, this perception will diminish. Until then, executives will be paid more than they are worth, putting shareholder value at risk.
Kopecki, Dawn & Goldman, Julianna. (2009). Obama…
Kopecki, Dawn & Goldman, Julianna. (2009). Obama Calls Bonuses Shameful and as Dodd Vows to Reclaim Money. Bloomberg. Retrieved February 27, 2009 at http://www.bloomberg.com/apps/news?pid=20601087&sid=anzJooSeABDM&refer=home
Oliphant, James. (2009) Stimulus' Cap on Executive Bonuses is Too Sweeping, Experts Warn. Los Angeles Times. Retrieved February 27, 2009 at http://www.latimes.com/news/nationworld/nation/la-na-stimulus-executive-pay15-2009feb15,0,7786166.story
Friedman, Milton. (1970). The Social Responsibility of Business is to Increase its Profits. New York Times Magazine. Retrieved February 27, 2009 at http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Balsam, Steven. (2007). Frontline Reaction to FASB 123(R) Journal of Accountancy. Retrieved February 27, 2009 at http://www.journalofaccountancy.com/Issues/2007/Apr/FrontlineReactionToFasb123.htm
Part of the reason for this, is because shareholders and the board of directors are allowing this to occur. To prevent the situation from becoming worse, shareholders and the board need to be more independent, by questioning the motives / actions of management. At the same time, there must be some kind regulations in place that can prevent the runaway abuses from occurring. If this kind of strategy can be implemented, it will reduce the abuses that are taking place, by letting management know that this behavior is no longer acceptable. At which point, the underlying amounts of compensation, will be tied directly to the performance of the individual vs. their position in the company.
Case Studies: Citigroup. AFL CIO, 2010. Web. 24 Oct. 2010.
Citi 2009 Annual Report. Citigroup. 2010. Web. 24 Oct. 2010.
Trends in CEO Pay. AFL CIO, 2010. Web. 24 Oct. 2010.
Chazan, Guy. Shell…
Case Studies: Citigroup. AFL CIO, 2010. Web. 24 Oct. 2010.
Citi 2009 Annual Report. Citigroup. 2010. Web. 24 Oct. 2010.
Trends in CEO Pay. AFL CIO, 2010. Web. 24 Oct. 2010.
Chazan, Guy. Shell Plans to Reduce Executive Salaries. WSJ, 2010. Web. 24 Oct. 2010.
Executive Compensation Programs and Incentives
In 1996 the average salary plus bonus for CEOs was $2.3 million. After other benefits were added, this sum rose to $5,781,300. Beginning with Revlon executive Michael Bergerac who broke the $1 million mark in 1974, executive pay and bonus plans have soared to mind-boggling proportions. Although various governmental agencies have set limits on tax-deductible executive compensation, these efforts not only failed but served to raise the bar on executive compensation even higher (Milkovich and Newman 455). In general, the CEO of a corporation makes at least twice as much as the next highest paid executive and 35 times the salary of the average worker (Bogie 118). This pay disparity becomes even more alarming when bad leadership causes mass layoffs and shareholder losses even as top executives continue to receive their oversized pay.
Executive compensation consists of five basic components: 1) base salary, 2) annual…
Bogie, Mord. Churchill's Horses and the Myths of American Corporations: Power, Stakeholders, and Governance. Westport, CT: Quorum Books, 1998.
Bohlander, George, Scott Snell and Arthur Sherman. Managing Human Resources. 12th ed. Ohio: South-Western College Publishing, 2001.
Dovring, Folke. Inequality: The Political Economy of Income Distribution. New York: Praeger Publishers, 1991.
Mathis, Robert L. And John H. Jackson. Human Resource Management. 9th ed. Ohio: South-Western College Publishing, 2000.
They are required to negotiate with the employers for more elastic contracts and provide incentive to the productive employees. The right-to-work laws generate economic exchanges. The enhanced demand for labor making the worker scarcer and therefore more worthy, results in out of the right-to-work laws. It is evident that the right-to-work laws entail benefit to the workers in crucial fields such as the availability of jobs. The right-to-work states were emerged to be the superior job producers during the past two decades as revealed by the U.S. Bureau of Labor Statistics. The advocators put forth that the analysis indicates even more advantages for the right-to-work states in the coming years. (the Economic Case for ight-to-Work Laws)
The critics held that the ight-to-Work Laws are not an antidote. There exist several right-to-work states that appear to fight economically while the non-right-to-work states are seen to have much economic prosperity. The workers…
Iacobucci, Edward M. (Fall 1998) "The Effects of Disclosure on Executive Compensation" University of Toronto Law Journal. Volume XLVIII; Number 4. Retrieved from www.utpjournals.com/product/utlj/484/484_iacobucci.html. Accessed on 10 December, 2004
Issue Brief: 'Right to Work'" Retrieved at http://www.iamaw.org/publications/Legislative_Issues/CoreLaborLawIssues/Right_to_Work.pdf . Accessed on 10 December, 2004
Kersey, Paul. "The Economic Case for Right-to-Work Laws" Retrieved at http://www.capitalresearch.org/pubs/pdf/x3800850718.pdf . Accessed on 10 December, 2004
Murphy, Kevin J. (October 1995) "Executive Compensation and the Modern Industrial Revolution" University of Southern California. Retrieved at http://www-rcf.usc.edu/~kjmurphy/kjmijio.pdf . Accessed on 10 December, 2004
Out of the previous two CEO's, Apotheker has by far the most experience. What more intriguing is that he has experience with both the entrepreneurial and corporate aspects of business? This provides a competitive advantage for HP as it has further know how in regards to new venture planning. It can also recognize viable new enterprises better as a result of the knowledge gained from Apotheker. Finally, Apotheker has extensive international experience which is of extreme importance in our global economic environment. This again can be utilized for HP's benefit in the future, as Apotheker undoubtedly has extensive international contacts to help his business.
With Apotheker extensive experience, I would venture to say that HP will move internationally. This in my opinion would a large priority as its U.S. market is heavily saturated and congested. As a result, many companies are battling to attract the same customers. This corporate warfare…
1) "Exec Bio." The Network. Web. 28 July 2011. .
2) "John T. Chambers." Cisco Biography. Jan. 2001. Web. 28 July 2011. .
3) "CSCO: Summary for Cisco Systems, Inc. - Yahoo! Finance." Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Web. 28 July 2011. .
4) "ALU: Summary for Alcatel-Lucent Common Stock- Yahoo! Finance." Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Web. 28 July 2011. .
Sometimes it seems that the salaries executives make at big corporations are entirely out of proportion with the value added to the firm by their being on the payroll. It makes sense that if someone, anyone, makes a certain wage, then they should be making at least that much money for the company. If someone is pumping gas for $7/hr, then he should be pumping at least $7 worth of gas every hour. If someone else is making $30 million/year at a big corporation, then he should be bringing in at least that much revenue, even if only indirectly. If a $30 million/year executive starts programs at the company that make $100million, then the $30million the company pays him is well-worth it. The trouble is that it is sometimes hard to decide the degree to which company performance is the result of an exec's contribution.
If we cannot…
1. Plishner, Emily S. (2004, Sept. 22). Executive Compensation. Chemical Week. 166(31), 21-28.
2. Kadlec, Daniel; Fonda, Daren; McDowell, Jeannie; Steptoe, Sonja (2004, June 14). The Lion In Sumner. Time. 163(24), 68-70.
3. Executive Pay. (2004, May 10). Forbes. 173(10), 124
4. Lavelle, Louis; Arndt, Michael. (2004, Feb. 23). Living Large In The Corner Office. Business Week, 3871, 47
Components of an Executive Compensation Plan
There are five basic components of an executive compensation plan:
Basic salary: although formal job evaluation still plays a crucial role in determining executive base salary, other sources tend to be more important. Most important is the opinion of a compensation committee, usually composed of the organization's board of directors. In most cases, the compensation committee takes over some information analysis previously done by the chief human resource manager (Samsa & Scheidt, 2013). This goes as far as analyzing performance records and salary survey data for executives of comparable firms. Executive compensation committees use the approach of identifying the main competitors and setting the executive's compensation at a level between the worst and best of these comparison teams.
Bonuses or short-term incentives: in most cases, annual bonuses are essential in executive compensation and are fundamentally designed to encourage better performance. Strikingly, the popularity of…
Henderson, R.I. (2006). Compensation management in a knowledge-based world (10th ed.). Upper Saddle River, NJ: Prentice Hall.
Samsa, M.K., & Scheidt, K.S. (2013). International employee equity plans: Participation beyond borders. The Hague [u.a.: Kluwer Law International.
Attention to this and other metrics will be used in determining performance and thus compensation.
J.P. Morgan Chase's accounting statements tell a similar though less extreme story. Non-interest revenue climbed substantially in 2009 after a significant drop in 2008, but have remained essentially flat over the past two years and over the five-year period. Interest income has shown a fairly steady decline, and though interest expenses are now a fraction of what they were four years ago the net revenue gains this has contributed to appear to be at an end, with interest expense unlikely to drop lower and with income and revenue both decreasing or at least flat lining. Compensation expenses have not showed the strong upward trend observable in Bank of America, but they have been subtly and steadily climbing despite poor performance. Though compensation does not appear to be as out-of-tune with performance at J.P. Morgan Chase…
It has been shown that the acquisition of talent not an area specific to each individual position at top companies. The highest-performing companies build pools of talent from which they can draw as needed (Michaels et al., 2001). Thus, there will inevitably be talented people who are at times underutilized. Their higher-order needs are not being met and thus they must be generously compensated. Otherwise, when the time comes to move someone from the organization to a fulfilling, higher-order executive position, the talent will not be there.
CEO pay proponents also point out that the bulk of the "excessive" executive compensation comes in the form of stock or options. These instruments were brought into executive compensation packages specifically to align the interests of management with those of the shareholders. It was the shareholders and the boards of directors who initiated this, as a means to protect shareholder wealth. There have…
Taub, Stephen. (2006). CEO Pay is Too High, Directors Say. CNN. Retrieved May 1, 2009 from http://www.cfo.com/article.cfm/8027003/c_8027107
FASB Statement 123 (1995). Retrieved May 1, 2009 from http://www.fasb.org/st/summary/stsum123.shtml
FASB Statement 123R (2004). Retrieved May 1, 2009 from http://www.fasb.org/st/summary/stsum123r.shtml
Case: Compensation and Governance at WorldCom. (2002) NYU Stern. Retrieved May 1, 2009 from http://pages.stern.nyu.edu/~lcabral/teaching/worldcom.pdf
Executive Stock Option Plans
"If the company does not do better than its competitors, but the stock market goes up, executives do very well from their stock options. This makes no sense." Discuss viewpoint. Can you think of alternatives to the usual executive option plan that take the viewpoint into account?
Executive stock options are performance-based incentive plans that became popular in the 1950s and 1960s. They declined due to the stock market crash of the 1970s, but returned aggressively returned in the 1990s (Kole, 1997). Today, most companies grant stock options to their top officers as part of executive compensation, along with salary and bonuses. Options that are awarded as part of a compensation package can be very valuable to executives when stocks are performing well. The challenge comes in when stock value is realized for executives even when a company is not faring well at all. This is…
Cicero, D.C. (2009). The manipulation of executive stock option exercise strategies: Information timing and backdating. Journal of Finance, 64(6), 2627 -- 2663.
Collins, D.W., Gong, G., & Li, H. (2009). Corporate Governance and Backdating of Executive Stock Options. Contemporary Accounting Research, 26(2), 403-445.
Hamilton, S. And Wise, D. (2008). Adding performance criteria to your stock options. Hay Group. Retrieved from http://188.8.131.52/haygroupusmkting/e_article001162460.cfm.
Hess, D. (2012). More Stock Rewards Tied To Performance. Crain's New York Business, 28(31), 0015.
hen he, representing the de facto shareholders the American taxpayers, found the executive compensation plans were out of line with the objectives of said shareholders, he acted.
In the free market system, this is the only response. Shareholders have rights and duties as the owners of companies. The executive team acts as their agents. The shareholders have not only the right but the capability to fire boards of directors and by extension executives whose compensation does not match their performance. The public outcry with respect to excessive compensation typically occurs when shareholders neglect their duty. Yet, there are examples where the shareholders have upheld their duty. These firms -- the majority -- do not make headlines, giving the impression that executive compensation is a rampant problem in society. If a company dares to pay bonuses will laying off workers or reducing their wages, the outcry hits the front page. However,…
Quijano, E. (2009). Obama tries to stop AIG bonuses. CNN. Retrieved December 3, 2009 from http://edition.cnn.com/2009/POLITICS/03/16/AIG.bonuses/index.html
Mehran, H. (1995). Executive compensation structure, ownership and firm performance. Journal of Financial Economics. Vol. 38 (2), 163-184.
Mullen. E. & Guigliano, G. (2009). Recoverability of equity-based compensation deferred tax assets. Journal of Accountancy. Retrieved December 3, 2009 from http://www.journalofaccountancy.com/Issues/2009/Jan/JanTPC.htm
Lagace, M. & Khurana, R. (2002). The irrational quest for charismatic CEOs. Harvard Business School. Retrieved December 3, 2009 from http://hbswk.hbs.edu/item/3095.html
Other benefits include payouts or large severance packages should an executive leave a corporation, whether or not they fulfilled the terms of their initial contract (Griner, 1996). There has been some criticism of late of agencies and organizations that offer compensatory packages for CEOS that do not meet organizational objectives. Employees in many instances are not afforded the same benefits or exemptions that executives are. Most employees are likely to be fired or laid off without any benefit or pay out particularly when their performance is considered marginal. This is not always the case however with executive pay.
Change on the Horizon
One of the biggest challenges that lies ahead for H managers and organizations will be holding executives accountable for the results they produce within an organization. Boards must more and more take a "rigorous approach to ensure that pay reflects performance" so that stakeholders can measure executive contributions…
Bowlin, W.F., Renner, C. & Rives, J.M. (2002). "The significance of gender in explaining senior executive pay variations: An exploratory study." Journal of Managerial Issues, 14(3): 331
Chingos, P. (2004). "Perspective: Responsible executive compensation" Mercer Human
Resources. Retrieved May
20, 2005: http://www.mercerhr.com/referencecontent.jhtml?idContent=1126240 .
Corporate executive pay needs to be reconsidered. Proponents of corporate greed will claim all sorts of outlandish reasons why their mansion on the iviera is benefitting the worker making $7 per hour in the fields. Companies will even use spurious research methods to justify corporate executive pay. The Institute for Policy Studies and the Center for Corporate Policy (2007) notes that "amounts for restricted stock, pension benefits, deferred compensation, and severance pay" are rarely factored into the evaluations of corporate executive pay to make it look like chief executives are not making as much as they actually are. Hiding money, misreporting money, and misreporting data are just a few of the ways corporate America is ruining America. It is high time the people of the United States took back their nation from the greedy corporate executives. A score of executives are laughing all the way to the bank while millions…
AFL-CIO (2011). 2011 Executive Paywatch. Retrieved online: http://www.aflcio.org/corporatewatch/paywatch/
Anderson, S., Pizzigati, S. Collins, C. & Cavanagh, J. (2007). Selfish interest. Center for Corporate Policy.
DeCarlo, S. & Zajac, B. (2009). CEO Compensation. Forbes. Retrieved online: http://www.forbes.com/2009/04/22/executive-pay-ceo-leadership-compensation-best-boss-09-ceo_land.html
Domhoff, G.W. (2005). Welath, income, and power. Who Rules America. Retrieved online: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
compensation strategies companies. For company selected, discuss a 350-word synopsis: • Evaluate compensation strategies executives company. • Evaluate compensation strategies sales forces contingent workers company.ID
Compensation strategies for two companies
Whole Foods, the organic grocery retailer, is one of the few companies that has actually reported garnering positive press as a result of its executive compensation policy. Whole Foods ' "caps the chief executive's salary and bonus at 14 times the average worker's pay" (Clark 2006). This is intended to reinforce the team-based leadership and performance reviews that structure the company's leadership within its stores throughout the nation. However, it has been noted that Whole Foods is not quite as democratic in reality as its written policy might suggest. CEO John Mackey made $1.8 million exercising his stock options, far more than his official salary of $436,000 (Clark 2006). However, his overall compensation is still relatively low, compared…
Blodget, Henry. (2012). Apple's new CEO Salary 378 million times more than Steve Jobs.
Yahoo Finance. Retrieved: http://finance.yahoo.com/blogs/daily-ticker/apple-ceo-salary-378-million-times-much-steve-154822390.html
Clark, Hannah. (2006). Whole Foods: Spinning CEO Pay. Forbes. Retrieved:
Q12. Describe the impact of legislation on the field of compensation management.
Minimum wage and overtime laws restrict the minimum amount employers can offer to workers; anti-discrimination legislation mandates that employees are compensated without regards to their racial, ethnic, gender, or disabled status.
Q13. Identify the impact of incentives such as bonuses to a compensation program.
For some professions, such as sales and investment banking, bonuses derive the bulk of the individual's expected salary. Bonuses can also be a means of distinguishing social status between employees. Bonuses can also simply be used to encourage higher levels of performance, based upon short-term outcomes.
Q14. Explain how the global market affects U.S.-based companies' compensation.
In a global marketplace, high-quality employees are more 'portable,' but because of the ability to outsource labor, employees may also find their salaries kept artificially low through the availability of lower-cost foreign workers.
Q15. Describe salary/market surveys.
The author of this report is asked to analyze and summarize the compensation plan of Merck Corporation, how it can be better, what they are doing right and what they are doing wrong. Inclusive in that will be an overall evaluation of their current plan, the beneficial ratio of internally consistent and market-consistent compensation systems, an evaluation of the current pay structure, two overall recommendations that the author of this report feels that Merck can and should undertake and the types of employer-sponsored retirement plans and/or health insurance plans that Merck makes use of as compared to that of competitors like Johnson & Johnson and others. While Merck, like most other companies, should always work to fine-tune and perfect their compensation plan, Merck is actually going quite well as made possible by their market and internal research as well as its wealth of resources and options that they…
Herper, M. (2013, April 17). Merck Could Return To Greatness If CEO Can Leave His Own Past Behind. Forbes. Retrieved February 28, 2014, from http://www.forbes.com/sites/matthewherper/2013/04/17/merck-could-return-to-greatness-if-ceo-can-leave-his-own-past-behind/
McIntyre, D. (2013, December 5). Can Walmart and McDonald's Afford a $15 Minimum Wage?. Yahoo Finance. Retrieved February 28, 2014, from http://finance.yahoo.com/news/walmart-mcdonald-afford-15-minimum-111559234.html
Merck. (2014, February 28). Merck.com. Merck.com. Retrieved February 28, 2014, from http://www.merck.com
Thurm, S. (2013, March 20). 'Pay for Performance' No Longer a Punchline. The Wall Street Journal. Retrieved February 28, 2014, from http://online.wsj.com/news/articles/SB10001424127887324373204578372444079319544
Caywood, Steven C. (2010). Wasting the Corporate Waste Doctrine: How the Doctrine Can
Provide a Viable Solution in Controlling Excessive Executive Compensation. ichigan Law Review, 109(1), 111-136.
ajor Thesis: This article reviews and seeks a solution for the controversial issue of corporate executives receiving enormous compensation. The article points out that public outcry against grossly, outrageously inflated bonuses and other compensations for executives has rarely done any good, but the group that suffers the most when executives receive such huge compensation are the shareholders. eantime this paper suggests that the "corporate waste doctrine" is one way to limit "excessive executive compensation"; if the corporate waste doctrine were enforced legislatively, the author explains, and executives continue to be paid outlandishly huge bonuses, the stakeholders would have a legal recourse in response.
Clearly it is unfair when an executive -- specifically a CEO -- receives "…roughly 400 times that of an…
Moreover, how could this article and the knowledge of corporate waste doctrine be of benefit to me in the future? If I were in the position of a shareholder in a corporation -- all I would have to do to become a shareholder is buy shares in any given company -- and executives in the corporation were given grossly over-the-top salaries, I would organize other shareholders and together we stakeholders would retain a competent attorney and plan to use the corporate waste doctrine.
Is there a precedent for bringing corporate waste to the point of litigation? There are a number of cases that have failed. But in the first big case, in which the Supreme Court recognized the corporate waste doctrine was in 1933 (Rogers v. Hill). Shareholders rebelled against the American Tobacco Company for paying what they believed to be excessive compensation; the High Court held that corporate waste occurs "…if a bonus payment has no relation to the value of services for which it is given" but the hard part for plaintiffs is proving corporate waste (Caywood, 117).
Conclusion: Before launching litigation as a shareholder holding stocks in a corporation, this article has shown me that in order to make a case for corporate waste, every previous case that has been brought by shareholders against boards of directors -- contesting absurdly high compensation -- must be carefully reviewed. What mistakes were made? What can be learned? Did the litigants make erroneous assumptions? What is the most recent ruling by courts at any level of the judiciary? How many shareholders can I get to back up my assertions, when a top executive walks away with a $22 million bonus, and we shareholders actually took a loss in this fiscal year? These are things I learned from this article and that I can apply in the future, because I do plan to become a shareholder in a successful corporation.
Further, it can also be noted that initially, I took coaching to be a critical undertaking in the development of skills as well as talents of leaders and executives. This is a view which has also been reinforced by my recent readings of the relevant texts. Just like I believed in the past, executive/organizational coaching enables executives to respond to various pressures in addition to meeting a wide range of organizational goals in an increasingly dynamic working environment. Hence in a way, one of the main purposes of coaching remains the development of skills and other competencies. This is a view I held in the past and which has further been enhanced or reinforced today.
However, it is important to note that I had a somewhat limited view of the purpose of an executive/organizational coach in so far as nurturing skills and talents of leaders is concerned. In this case,…
Flaherty, J. (2010). Coaching: Evoking Excellence in Others, 3rd Edition. Burlington: Routledge
Goldsmith, M. & Lyons, L. (2006). Coaching for Leadership: The Practice of Leadership Coaching from the World's Greatest Coaches, 2nd Edition. San Francisco: John Wiley & Sons.
Hudson, F.M. (1999). The Handbook of Coaching: A Comprehensive Resource Guide for Managers, Executives, Consultants, and Human Resource Professionals. San Francisco: Jossey-Bass Publishers.
Peltier, B. (2010). The Psychology of Executive Coaching, 2nd Edition. New York: Taylor and Francis.
I believe that Keith was entirely justified in insisting that the job, not the person, be evaluated. If a company has established protocol, then that protocol should be followed. The receptionist in question has a boss who is in charge of evaluating her performance on a regular basis; the committee would likely be overstepping its boundaries if they had decided to evaluate a single person, rather than the position they were intended to evaluate. Keith would likely be justified in reminding the other committee members of their responsibilities and duties regarding the committee's purpose.
Initially, Keith was bothered by the possibility of a confrontation at the meeting with certain committee members. It would therefore behoove Keith to approach the situation with care and consideration, while maintaining a sense of balance and humbleness. One thing that Keith does not want to do is approach the other members of the committee…
Baumann, A. & Kolotylo, C.; (2009) The professionalism and environmental factors in the workplace questionnaire: Development and psychometric evaluation, Journal of Advanced Nursing, Vol. 65, Issue 10, pp. 2216-2228
Johnson, R.E.; Silverman, S.B.; Shyamsunder, A.; Swee, H.Y.; Rodopman, O.B.; Cho, E.; Bauer, J.; (2010) Acting superior but actually inferior?: Correlates and consequences of workplace arrogance, Human Performance, Vol. 23, Issue 5, pp. 403 -- 427
Roberts, G.E.; (2001) An examination of employee benefits cost control strategies in New Jersey local governments, Public Personnel Management, Vol. 31, pp. 301 -- 315
Tocher, N.; Field, H.S.; Giles, W.F.; (2006) Valuations of compensation and benefit items by new entrants into the professional workforce: Do men and women differ?, Journal of Employment Counseling, Vol. 43, Issue 2, pp. 84 -- 96
Compensation in Wachovia Bank's Base Employee Tier
Bank Teller Pay
Compensation in Wachovia Bank's Base Employee Tier
Banking Industry Practices
etention ates for Tellers
Opportunity Cost for Promotion
Consideration of Drawbacks
Compensation of tellers at Wachovia Bank is closely tied to turnover rates. Employee turnover is costly because resources must be expended to replace employees who leave. ecruitment and training can be expected to be approximately one-third of an employee's salary. In the banking industry, the turnover rate for tellers also impacts the bank's ability to efficaciously cross-sell investment products. High turnover rates of promotable employees contribute to increased expenditures by the human resources department since searches must be orchestrated with outside executive search consultants. The banking industry is in survival mode. In order for Wachovia Bank to survive in this industry, we must take care of our frontline. The frontline of Wachovia Bank is our tellers. A…
Careers: Teller, (2011). Wells Fargo / Wachovia [Web] Retrieved https://www.wellsfargo.com/careers/fit/opportunities/teller
Hourly rate snapshot for bank teller jobs, PayScale. (n.a., n.d.) [Web] Retrieved http;//www.payscale.com/research/U.S./Job=Bank_Teller/Hourly_Rate
Looking for research on the cost of staff turnover? (2011). LinkedIn. [Discussion] Retrieved http://www.linkedin.com/answers/management/business-analytics/MGM_ANA/
612746-20209499 [Chartered Institute of Personnel and Development (CIPD) in the UK]
Compensation Components Offered at a Foreign Work Site
The compensation components offered to an employee of a U.S. company with the opportunity to take a job at a foreign work site availed through some form of an insurance plan. An important set of components is always non-insurance based and provides income to the employees at a foreign work site. These benefits can be classified into three major segments:
Loss of job income continuation
Disability income continuation
Accident and health protection
Liability and property protection
A special set of services and benefits known as prerequisites (Henderson, 2006).
All the categories contain various compensation components with various features given to an employee of a U.S. company with the opportunity of working at a foreign work site.
Disability income continuation
Disability can be categorized as temporary, singular, partial, or total. When the employee is unable to work because of some health related problem…
Henderson, R.I. (2006). Compensation management in a knowledge-based world (10th ed.). Upper Saddle River, NJ: Prentice Hall.
Goel, D. (2008). Performance appraisal and compensation management: A modern approach. New Dehli: Prentice-Hall of India.
Brief Overview of Costco's Compensation System
Costco has a unique compensation system within its industry. The company competes as a cost leader, where it features low prices as a means of winning business. Cost leaders typically try to have rock bottom costs throughout their operations, from the supply chain to labor and everywhere in between. These competitors will use their bargaining power to get the cheapest labor possible, bargaining down wages, benefits and other perks. This often results in a poor quality labor pool with high levels of turnover, but these companies accept that as part of having a low cost labor pool and account for that is the design of the low cost business model (Lutz, 2013).
The approach that the company has to compensation is therefore counterintuitive to the way that most of its competitors run their human resources, but there is internal logic to Costco's…
Costco. (2014). Benefits. Costco. Retrieved May 31, 2014 from https://costcobenefits.com/cms/your-wealth/401k/index.shtml
Deci, E., Ryan, R. & Koestner, R. (1999). A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation. Psychological Bulletin. Vol. 125 (6) 627-668.
Goldberg, A. & Ritter, B. (2005). Costco CEO finds pro-worker means profitability. ABC News. Retrieved May 31, 2014 from http://www.sba.pdx.edu/faculty/susanm/semaccess/BA%20385/Costco%20CEO%20Finds%20Pro-Worker%20Means%20Profitability.doc
Gray, C. (2014). Tangible benefits of reducing turnover. Houston Chronicle. Retrieved May 31, 2014 from http://smallbusiness.chron.com/tangible-benefits-reducing-turnover-21668.html
Compensation Plan Outline
Ford Motor Company is the largest manufacturer of heavy commercial vehicles and second largest producer of automobiles in the world. Their range of vehicles comprises 70 different types that include Jaguar, Lincoln, Volvo, Mercury, Aston Martin, and Ford with presence in over 30 countries worldwide. Ford employs over 300,000 employees across the globe. In the United States itself, Ford has an employee strength nearing 100,000 employees and sales exceeding three million units (Joesph, 2003).
Compensation Plan of Ford Motor Company
Association with Ford Motor Company is a fulfilling experience for the workforce. The company offers motivation for exemplary work ethics, opportunities for individual and collective growth that translates into challenges to be met and overcome. The vast range of vehicles produced in the company provides the stimulus for development of the personnel at all levels, as does the cultural and regional diversity of the workforce itself. Ford…
Daniels Fund Ethics Initiative (2014).Ford Motor Company Manages Ethics and Social Responsibility. Retrieved from http://danielsethics.mgt.unm.edu/pdf/ford-motor-case.pdf
Ford Motor Company (2014). Notice of 2014 Annual Meeting of Shareholders and Proxy Statement. Retrieved fromhttp://corporate.ford.com/doc/457/143/ir_2014_proxy.pdf
Ford Motor Company (2011). Summary of Compensation and Benefits for Ford Motor Company. Retrieved from http://corporate.ford.com/doc/r-full-time-benefits.pdf
Joseph, B.S. (2003). Corporate ergonomics program at Ford Motor Company, Applied Ergonomics, 34, 23-28. Retrieved from http://www.sciencedirect.com/science/article/pii/S0003687002000807
The IRS may also impose a 10% excise tax or a maximum of $10,000 on an officer who knowingly entered into a transaction (Samuels and Shoretz).
When this happens, the official endeavors to enter a rebuttable presumption that the compensation and benefits are reasonable (Samuels and Shoretz 2002). The board of directors or trustees must approve the three criteria for the rebuttal. In the first, the board must be composed entirely of members unrelated to and not beholden to the officer in question. In the second, the board must possess reliable data, comparing its compensation level with those of other organizations in similar situations. This is intended to lead the board to make sure the officer's compensation has comparable fair-market value with others in the geographical area. The data may be secured form reputable and independent surveys and the third requires the adequate documentation of the fixed compensation as its…
Auld, H.M. (2002). Better salaries, master's degrees and competition. 2 pages. Library Administrator's Digest: BCPL Foundation. Retrieved on September 24, 2008 from http://findarticles.com/p/articles/mi_qa3850/is_200212/ai_n9154776?tag=content;col1
Dagan, D. (2005). Lawyers required in claims disputes. 3 pages. Central Penn Business
Journal: Journal Publications, Inc. Retrieved on September 24, 2008 from http://findarticles.com/p/articles/mi_qa5295/is_200502/ai_n24294898?tag=content;col1
DeCarlo D.T. (2001). Illegal employment. 2 pages. Risk Insurance: Axon Group.
Removing losses from the company's books made the main corporation look more attractive. Enron appeared to be operating at a profit; a key factor in the valuation of any company's stock. By virtue of this "success," Enron was able to raise even more money for more investments.
The architects of all this "growth" profited accordingly. Ken Lay and his associates held large amounts of exceedingly valuable and overvalued stock. hen Enron's cheating was finally exposed, it became painfully apparent to what extent Ken Lay, Jeff Skilling, and other Enron executives had been making vast sums of money on the backs of gullible workforce, and a gullible public:
The "Enron Nine" (if we may call them that) are J.P. Morgan Chase, Citigroup, Credit Suisse First Boston, Canadian Imperial Bank of Commerce, Bank of America, Merrill Lynch, Barclays, Deutsche Bank and Lehman Brothers. These financial institutions collaborated with the now-bankrupt energy company…
http://www.questia.com/ PM.qst?a=o&d=5001896979' target='_blank' REL='NOFOLLOW'>
3. Does public awareness of the CEO's salary influence the branding of an organization? How? Give two examples, one negative and another positive.
It is perfectly understandable that public awareness of CEO salaries play a role in establishing corresponding attitudes toward the corporate Brand. Where corporations demonstrate socially responsible concern and altruism in the manner exhibited by corporate executives like Bill Gates of Microsoft and Ted Turner, or incorporated within the mission statements of Google, the corporate brand or public image is not necessarily harmed by public awareness of very lucrative executive compensation packages.
On the other hand, public awareness of corporate greed, social irresponsibility, and lucrative executive compensation likely undermines the maintenance of a positive corporate image or brand. Typical examples would include Circuit City, whose CEO, Philip Schoon's "wage-management initiative" resulted in the firing of 3,400 $12-per hour employees in order to replace them with employees earning $8…
Anderson, Sarah. Despite Failures, CEOs Cash in; the Hartford Courant, April 14, 2008. Retrieved April 15, 2008 from the Hartford Courant website, at http://www.courant.com/news/opinion/editorials/hc-anderson0414.artapr14,0,5653663.story
Lewis, Al. Marriage of Losers a Worst Buy; the Denver Post, April 15, 2008. Retrieved April 15, 2008 from the Denver Post.com website, at http://www.denverpost.com/business/ci_8925078
Despite Crystal's criticisms of executives earning outrageous sums of money that are not linked to their performance, the reality is that most executives have a compensation package that is based on performance in some way or another (Codon and Lynch, 2004). However, the use of stock options and other equity-based incentives create enormous incentives to manage the performance of companies for short-term stock price gain. This often comes at the expense of strategy implementation that could sacrifice profits in the short-term for long-term benefits. Also, underlying executive actions there may be the desire for personal wealth, not the strength of the corporation obtained through a well thought out strategic plan.
Of the recommendations offered in the case, the two that are the most promising are linking pay to long-term profitability and putting workers on the boards of directors. Instead of being pressured to make quarterly and annual profits,…
Codon, D. And Lynch, D. (2004, January). Recent developments in executive compensation. The Corporate Compliance and Regulatory Newsletter, Vol 1. No. 5. Retrieved June 26, 2005 from Web site: http://www.rkmc.com/pdf/exec_compensation.pdf
Glassner, F. (2002, March 6). Who is to blame for outrageous executive pay? One less Barbie dream house won't hurt anyone. HRM Guide. Retrieved June 26, 2005 from Web site: http://www.hrmguide.net/usa/rewards/rewarding_performance.htm
Moreover, Coleman is right in suggesting that a better compensation package could be offered in an attempt to retain Carpenter.
How could the crisis have been avoided?
For one, at the time of hiring Carpenter, I would have insisted on the company's in-house developmental data and operations information remaining confidential after Carpenter moves on to another firm. Even if Carpenter had refused to sign a contract that would prevent him from leaving and signing on to another company, the contract could have included a confidential information clause, preventing him from sharing company (trade) secrets with future employers. Steven Emanuel and Lazar Emanuel explain in their book Corporations that any of the following acts can be considered "wrongful taking of trade secrets": a) soliciting a "large number of the former employer's customers"; b) soliciting of the former company's employees; and c) use of the former employer's "secret processes" or other strategies…
Ellig, Bruce R. (2007). The Compete Guide to Executive Compensation. New York: McGraw-
Emanuel, Steven, and Emanuel, Lazar. (2009). Corporations. Aspen, CO: Aspen Publishers
The statement regulating accounting for stock-based compensations defines a fair value-based method of accounting for an employee stock option or similar equity instrument and encourages all entities to adopt that method of accounting for all of their employee stock compensation plans. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value-based method of accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees. The fair value-based method is preferable to the Opinion 25 method for purposes of justifying a change in accounting principle under APB Opinion No. 20, Accounting Changes. Entities electing to remain with the accounting in Opinion 25 must make pro forma disclosures of net income and, if presented, earnings per share, as if the fair value-based method of accounting defined in this statement had been applied.
Stock options are the most frequently used method in…
Cadbury, Sir a. 1992. Committee on the Financial Aspects of Corporate Governance. London, Gee.
Combined Code. 2003. The combined code on Corporate Governance. London, Financial Reporting Council.
Directors' Remuneration Report Regulations. 2002. Available at http://www.opsi.gov.uk
Girma, S., Thompson, S. And Wright, P.W. 2007. Corporate governance reforms and executive compensation determination: evidence from the UK, the Manchester School, vol. 75(1): pp. 65-81.
CEO's salary, bonus, and long-term compensation with respect to various organizational, financial and CEO factors such as corporate reputation, growth in employees, company size, and return on equity, CEO tenure and CEO stock ownership. In relation to the general performance of the organization
This paper utilizes the various measurement of chief executive compensation as exploited by the various detailed pieces of literature and employed as the dependent variable in a model based on multiple regression theory. It explores the extent to which the CEO's compensation package affects the overall performance of the whole firm or corporation for which he or she works for.
The purpose of this research is to determine the extent to which the CEO's remuneration a large corporation such as Coca Cola has on the general performance of the organization.
The CEO's compensation has for a long time been source of attention from various groups in…
Anderson, R.C & Bizjak, J.M. 2003) An Empirical Examination of the Role of the CEO and the Compensation Committee in Structuring Executive Pay.Journal of Banking and Finance, 27.
Baiman, S. And Verrecchia R. (1995).Earnings and price-based compensation contracts in the presence of discretionary trading and incomplete contracting. Journal of Accounting and Economics, Vol. 20:1, pp. 94-120.
Barro, J.R.; Barro, R.J. (1990) Pay, Performance and Turnover of Bank CEOs, Journal of Labor Economics, 8.
Bebchuk, L.A & Fried, J.M.( 2003) Executive Compensation as an Agency Problem. National Bureau of Economic Research Working Paper Series, No. 9813.
Incentive Pay: Strategic Compensation and Its Impact on Human esource Management in the United States
Compensation refers to a wide array of benefits and pay that a company uses to reward employees for performance. Strategic compensation refers to any type of compensation strategy that is aimed at rewarding good performance. Because the variety of companies and their internal structure varies wildly, strategic compensation strategies can vary wildly. For example, many direct sales companies where employees are actually independent contractors use strategic compensation strategies, giving prizes for hitting certain sales goals and increasing compensation percentages with sales. On the other end of the spectrum, large corporations almost always include stock options in higher-level compensation strategies, which directly ties the degree of financial reward to overall corporate performance. Individual companies can tailor their compensation strategies to what their firm does, the number of employees, and what is likely to motivate those employees.…
Berrone, P. & Gomez-Meija, L.R. (2009). Environmental performance and executive compensation: an integrated agency-institutional perspective. Academy of Management Journal, 52(1), 103-126.
Chen, C. & Huang, J. (2009). Strategic human resource practices and innovation performance:
the mediating role of knowledge management capacity. Journal of Business Research, 62(1), 104-114.
Chenevert, D. & Tremblay, M. (2009). Fits in strategic human resource management and methodological challenge: Empirical evidence of influence of empowerment and compensation practices on human resource performance in Canadian firms. The International Journal of Human Resource Management, 20(4), 738-770. doi:10.1080/09585190902770547
DAV's Chief Executive Officer, Arthur ilson, last year got $287,000 in compensation plus $72,994 in "other" pay from DAV or related organizations; General Counsel Christopher Clay $198,558, plus $144,331; and J. Marc Burgess, the executive director of the national headquarters, $163,483, plus another $122,532; Vice Chairman Larry Pozin seemed to get best deal, earning $107,240 for an average of just five hours of work a week in 2012 (Crudele, 2013).
There is some debate about whether the compensation is justified. Surely these individuals might earn a higher income in the private market. However, the compensation packages given to the executive staff have outraged some people to the extent that there is now an organized group with a website online that is called Veterans for DAV Reform. This group claims that "currently, the Disabled American Veterans is held captive by an opportunistic gang of charlatans only interested in their own gigantic…
Charity Navigator. (2012). DAV (Disabled American Veterans) Charitable Service Trust. Retrieved from Charity Navigator: https://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=7589
Crudele, J. (2013, November 12). The Ugly Business of Stealing Money Meant for Vets. Retrieved from New York Post: http://nypost.com/2013/11/12/the-ugly-business-of-stealing-money-meant-for-vets/
DAV. (N.d.). Mission Statement. Retrieved from DAV: http://www.dav.org/learn-more/about-dav/mission-statement/
PR Newswire U.S.. (2013, September 5). Disabled American Veterans Non-Profit Charity Execs Paid as much as the President, while 200,000 Veterans Homeless. Retrieved from PR Newswire U.S.: http://eds.b.ebscohost.com.proxy-library.ashford.edu/eds/detail?sid=1141c2a2-2510-4579-b7fe-2c1c88a0590b%40sessionmgr112&vid=2&hid=104&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=bwh&AN=201309051018PR.NEWS.USPR.NE74538
Performance Management Process and the CEO
Critique and evaluate considerations that are traditionally used to determine CEO compensation
Many reward compensations adopted by the CEOs of this era contain five primary components: limited stock grants, limited option grants, payouts for incentive plans, annual bonuses, and salary. While the amounts of bonuses, compensation and perquisites found in not-for-profit sectors may pale in comparison to those in the for-profit world, they generate combined reactions. Their existence can ignite debate, especially in periods of shrinking budgets and increasing costs. However, the ability to hire, maintain, and compensate CEOs is essential in all sectors, and is mostly achieved using a variety of executive compensation plans. The issues around the design of these systems in both the business and not-for-profit areas are similar (Bhattacharyya, 2011).
The last two decades have witnessed a drastic transformation of the executive compensation in many organizations. Compensation of top executives…
Bhattacharyya, D.K. (2011). Performance management systems and strategies. Dehli: Pearson.
Bebchuk, L.A., & Fried, J.M. (2004). Pay without performance: The unfulfilled promise of executive compensation. Cambridge, MA: Harvard University Press.
Blazey, M.L. (2013). Insights to performance excellence, 2013-2014: Understanding the integrated management system and the Baldridge criteria. Milwaukee: Asq Quality Press.
Chingos, P.T. (2004). Responsible Executive Compensation for a New Era of Accountability. Hoboken: John Wiley & Sons.
Nike Inc. is an America multinational company with engagements in development, manufacturing, design, and global marketing of equipment, apparel, footwear, services, and accessories. The firm has its headquarters in Beaverton in Portland metropolitan region. The company remains part of the largest apparel and athletic shoes supplier in the world. The company is a notable manufacturer of different sports equipment reaching a revenue mark of U.S.$23.1 billion in 2012. The year 2012 was illustrated by the employment of close to 44,000 individuals across the world. Further, the brand was estimated to be at the value of $19 billion that made it a valuable brand within other sports businesses. Nike was developed in 1964 under the name Blue ibbon Sports (Farrell, 2009).
The founders were Phil Knight and Bill Bowerman who later adopted the name Nike, Inc. In 1971. The firm took the name against the Greek meaning of 'goddess of victory'.…
Berger, L., & Berger D., (2008). The compensation handbook. New Jersey: McGraw-Hill Professional.
Biswas, B.D. (2012). Compensation and Benefit Design: Applying Finance and Accounting Principles to Global Human Resource Management Systems. New York: FT Press.
Estreicher, S., & Reilly, D.J. (2010). Employee Benefits and Executive Compensation: Proceedings of the New York University 59th Annual Conference on Labor. New York: Kluwer Law International.
Farrell, B.S. (2009). Human Capital: Actions Needed to Better Track and Provide Timely and Accurate Compensation and Medical Benefits to Deployed Federal Civilians. New York: DIANE Publishing.
Verizon Compensation Strategy
Verizon Communications is a publicly traded company registered in the United States as a telecommunications and broadband company. It trades under the name Verizon. It is a market leader in the telecommunications industry and strives to provide excellent services that satisfy consumers. Worker compensation has always been an important aspect of Verizon's overall strategy to keep employees motivated and provide excellent service to consumers. In 2010, the company did a review of their compensation strategy with the aim of improving it. The 2010 compensation decisions, designed by a committee and approved by shareholders, took effect in 2011.
Briefly describe the company you researched, its compensation strategy, best practices they are applying, and compensation-related challenges they are facing.
Verizon's compensation strategy is founded on providing fair compensation to its employees. All of Verizon's employees get a base salary that is pegged on market rates and incentives…
Cheng, Q., & Farber, D.B. (2008). Earnings Restatements, Changes in CEO Compensation, and Firm Performance. The Accounting Review, 83(5), 1217-1250. doi: 10.2307/30243544
Tosi, H.L., & Greckhamer, T. (2004). Culture and CEO Compensation. Organization Science, 15(6), 657-670. doi: 10.2307/30034768
Williams, M.L., McDaniel, M.A., & Ford, L.R. (2007). Understanding Multiple Dimensions of Compensation Satisfaction. Journal of Business and Psychology, 21(3), 429-459. doi: 10.2307/30221746
New Trends in Employee Compensation and Benefits
This essay examines new trends in compensation and benefits. The essay discusses the impact of benefits offerings for both employer and employee, and reviews recent trends and discusses their significance.
Reasons for working vary from individual to individual, and compensation is usually among the most important reasons. However, many people list other factors that are almost equally important to them. These factors can range from opportunities to develop new skills, to an experiencing a sense of community, to more tangible benefits such as provisions for retirement. Currently benefits programs account for approximately one third of the average worker's total compensation, based on the size, profitability and philosophy of a particular employer. Programs that are effectively designed and promoted work to the advantage of both employers and employees (ish).
Compensation packages have changed significantly over the years. They no longer consist of a flat…
Gioia-Herman, Joyce. (2011). Trends in Employee Benefits. Engine Builder Magazine. Web. 3 March 2012.
Society for Human Resource Management. (2011). 2011 Employee Benefits Research Report. Web. 3 March 2012.
Wish, Fred. (2012). Trends in Employee Benefits -- Beyond the Fringe, Benefits Plans for Today's Workforce. Web. 3 March 2012. .
Zoo Media Group. (2012). New Trends in Employee Compensation. Web. 3 March 2012.
Dental care under MCSS fee schedule for Ontario Works adults;
Prosthetic appliances such as back braces, surgical stockings, and artificial limbs (provision, replacement, and repairs);
Wheelchairs and repairs for the portion not covered through ADP;
Hearing aids and batteries (co-payment under Ministry of Health and Long- Term Care's Assistive Devices Program (ADP) for the provision, replacement, and repairs to hearing aids);
Vision care for adults;
Dentures where deemed appropriate;
Cost of completing other medical forms; and Other items may be approved individually based on medical documentation stating the need and the benefits.
7. It is important to carefully define these factors and determine an appropriate number for the organization. The definitions should not overlap, resulting in the same job dimension being measured multiple times. However, the important aspects of each job and what the organization wants from its employees must be included. From there, home country-based compensation is the following…
Compensation Improvement Company ABC
The goal of this review will be to examine the overall objectives of the pay model for ABC corporation, a small manufacturing plant that specializes on developing nanosecond electronic components for select suppliers. As a job analyst my position requires that I evaluate each position in the company and ensure that a compensation structure is developed that is in line with the strategic goals and objectives of the organization which include having the workforce reflect the diversity in the community.
The use of automation and high tech systems has enabled the workforce to remain relatively low, less than 100, and may even substantially reduce the workforce in the upcoming years. The number of employees that must be reduced may be limited if employees are offered alternative forms of compensation rather than pay based incentives, which will decrease the overall financial burden on the company at large.…
Offering benefits such as healthcare and even stock options to lower-level employees, a compensation strategy also pursued by Starbucks (a company both literally and figuratively 'green' in its image), is another example of a policy that can benefit both the company and employees -- employees enjoy greater security, while the companies reduce the high rate of workplace turnover that is endemic to the service industry at companies like McDonald's. In fact, as Eric Schlosser observed in Fast Food Nation, fast food companies have often deliberately made life unpleasant for lower-level employees, to reduce the need to offer them promotions, benefits, and higher pay, on the theory that it is easy to train a new worker to operate a cash register. "How can workers look to this industry as a career…when it pays them the minimum wage and provides them no health benefits" (Schlosser 2001, p. 88). hole Foods and Starbucks…
"Benefits." Google website. February 8, 2010.
"Careers." Whole Foods Market. February 8, 2010.
Crafting a Compensation and Benefits Plan
Fishers is a mid-sized manufacturing company out to maintain market leadership through the development and implementation of a compensation plan that meets the needs of the owners, clients, as well as employees. Compensation programs are critical to the effectiveness of the organization as they play a fundamental role in employee motivation, satisfaction, and productivity. The company seeks to achieve two crucial objectives from the implementation of this compensation and benefits plan; i) to reduce turnover, which has been an imminent problem over the last couple of years; and ii) to attract new talent, while retaining and improving the existing one.
The company is at a critical juncture; it can no longer offer the perks of a small entrepreneurial enterprise since it has exceeded the employee threshold for such categorization. Employees have been complaining over what they think is below-market compensation, and…
Basset-Jones, N. & Lloyd, G.C. (2005). Does Herzberg's Motivation Theory have Staying Power? Journal of Management Development, 24(10), 929-943.
Beam, B.T. & McFadden, J.J. (2012). Employee Benefits (6th ed.). Chicago, IL: Dearborn Trade Publishing.
Cappelli, P. (2011). Why Good People can't Get Jobs: the Skills Gap and What Companies do about It. Pennsylvania, PA: Wharton Digital Press.
Miner, J.B. (2007). Organizational Behavior 4: From Theory to Practice. New York M.E. Sharpe.
executives practice win-win negotiations. While positional bargaining encourages parties to compete, win-win fosters collaboration. The outcome is a solution that optimizes results, rather than makes one party the loser. Specifically win-win negotiations encourages:
Critical thinking skills: A satisfactory negotiation depends on quality inputs and an understanding of the overall impact. Critical thinking is enhanced when both parties work toward the same goal.
Mutuality: SC is positioned to set the standard for future computer generations. However, due to cash constraints, I recognized that the company could not pay my market value. Because the VP, in turn, expressed his concern for my needs, which are to be part of a start-up venture and to extend the business internationally, we could reach an agreement that allowed for a deferred salary increase.
Empathetic listening: Because we were seeking common ground and not looking to be right, listening skills were greatly improved. Each party listened…
Remuneration & ther Subjects
The authors of this report have been asked to assess a number of subjects surrounding remuneration of employees and the overall corporate/social ethics involved in the same in Australia. There are also some tangential and related subjects that will also be spoken of. In total, there are five broad-based questions. The first question speaks about risk aversion, profit/wealth maximization, wealth management, different stances that different people and personnel take vis-a-vis risk and financial reporting manipulation. The second question references the horizon problem. This second question looks at the different motivations and perspectives that different people in an investment and accounting situation might take. Managers have their axe to grind and stakeholders typically have a different one. How bonuses for investment managers figure in will also be explored. Finally, there will be a review for the fifth question that pertains to the transparency and visibility of remuneration…
One way to counter the horizon problem is through use of equity instruments as a component of executive remuneration. Equity ownership and share options encourage managers to care not only about the short-term but also about the future (Conyon & Florou 2006). If a manager has shares and share options that cannot be exercised until after a period of time post-retirement, then they will be unlikely to engage in short-term firm value destroying actions (Conyon & Florou, 2006). As previously discussed, it is often the accounting measure of earnings which drives the calculation of bonuses paid to managers. Managers can manipulate accounting information in a manner such that a company will display short-term profitability. This could be achieved directly, through a reduction in spending on research and development or indirectly through reduced depreciation as a result of lower capital expenditure (Conyon & Florou 2006). It could be argued that as a result of this, there must be a reduced reliance on accounting information to drive the calculation of bonus plans that are designed to address the horizon problem. Managers, in particular CEOs and CFOs, have the greatest ability to manipulate this information. Bonus plans based on share payments and share options then force the manager to make decisions that result in an appropriate balance of both short-term performance as well as long-term growth and viability. Conyon & Florou (2006) suggest that this may even act as a substitute, allowing for reduced monitoring of executive activity.
Question III -- Non-Salary Components
Just as with regular employees, the facets of compensation relating to non-cash compensation is a major part of how executives are paid (IRS, 2014). There are multiple purposes and reasons for why these non-cash components are included. These include the fact that it is normal industry standard to offer certain benefits (e.g. health insurance, pension, etc.) (Jakobson, 2012). Cash compensation can vary widely with an obvious example being bonuses that are tied to the market, a company's performance and so forth (Thurm, 2013). However, non-cash compensation is very similar in that it manifests in a number of different ways. One reason to make heavy use of non-cash compensation is to skirt laws that relate to cash compensation such as regulations relating to bonuses, commissions, base salary and so forth (Holmberg, 2014). However, putting the kibosh on non-cash compensation such as stock and other similar items could cause a brain-drain situation for publicly traded companies (AP, 2009). Private
Total Compenstion Statement Memo
Human resource (H) policies and decisions play a crucial role in an organization. They serve as a driver of employee productivity as they directly or indirectly affect employee engagement, job commitment, employee satisfaction, and employee retention. An important H function relates to compensation, which is basically concerned with determining the amount of remuneration and benefits employees get as a result of their input to the organization. Sufficient compensation is crucial for attracting and retaining the right people for the job (Stredwick, 2014). The position of an administrative assistant is without a doubt an important position, underscoring the need for competitive and attractive compensation. As per the U.S. Bureau of Labor Statistics (BLS), an administrative assistant earns an average income of $55,460 per year or $26.66 per hour (BLS, 2017). More specifically, an administrative assistant in the category of "Management of Companies and Enterprises" earns an average…
Bureau of Labor Statistics (BLS) (2017). Executive secretaries and executive administrative assistants. Retrieved from: https://www.bls.gov/oes/current/oes436011.htm
Mello, J. (2015). Strategic human resource management. 4th edition. Mason: Cengage Learning.
Stredwick, J. (2014). An Introduction to Human Resource Management. London: Routledge.
Executive Salaries are inflated.
'Bottom Line': Executive salaries are disproportionately high, causing a crisis of both economics and morale within American enterprises.
hat is the justification behind a particular salary?
Encyclopedia Britannica defines a salary as a wage derived from human labor. hat is the 'human labor' of an executive
Labor of executive involves managing company.
Labor of executive involves presenting a favorable image to the public.
Does the current labor of executives justify their current salaries?
ays that high salaries of executives detract from company morale.
ays that high salaries of executives are injurious to company economically.
Possible objections to lowering salaries.
Difficulty in recruiting potentially talented executives.
Hard work done by executives -- '24-7' job
C. "Based on standards across the industry" (Letter to Editor, New York Times)
Responses to objections
Excessively high salaries encourages executives to go where money is, not because care about/believe in company
Associated Press Wire. World.Com CEO got no bonus in 2001. The New York Times. April 22, 2002.
"Crown Cuts Executive Salaries." February 23, 1999. Pittsburgh Business Times.
Dudley, Brier. "Microsoft Executive Salaries Outpace Company's Growth." Wednesday, October 24, 2001. Seattle Times. Business & Technology Section.
Guda, Nelson. "Executive Rewards." The New York Times. Letter to the Editor. April 19, 2002.
Company's Compensation And Benefit Package
A number of factors determine how a company compensates its employees. These factors may include economics, psychology and even sociology. To an economist compensation is viewed as a labor market determinant (Filer, Hammermesh, & ees, 1996). As a human resource manager for Vanguard Industries I have been entrusted with the responsibility of explaining to the Chief Executive Officer (CEO) that guided my development of the company's compensation and benefit plan. I will specify economic factors I considered while coming up with the company's compensation and benefit packages, the manner in which they do so and the relative and absolute importance of each. Before coming up with a compensation and benefit scheme, it is imperative that matters pertaining employees' skill level, age, gender and minority and majority status are factored as they affect an individual's reward preferences and their view on what they contribute to an…
Filer, R., Hammermesh, D., & Rees, A. (1996). The Economics of Work and Pay 6th ED., New
York: Harper Collins.
Landes, W.M. (1968). The Economics of Fair Employment Laws. Journal of Political
Economy, 76: 507-52.
Total Compensation Methods
Impact of various compensation methods and benefit programs on employees and organizations.
The compensation term is used for the combination of salaries, benefits and wages for the employee. It also includes hourly or annual salary, bonuses, benefits and incentives like short-term disability insurance, retirement plan and health coverage. Thus, a comprehensive package includes a combination of different components. The collection of all components is relevant to "Employee Compensation Plan" along with the way of payment and the reasons individuals collect salary increases, incentives and bonuses (Milkovich and Newman, 2005).
Employees who are not exempted, receives hourly wages with an addition of overtime payment for working more than 40 hours in a week. The rate of overtime to hourly wages is one and half. Employees having a bargaining and collective contract with the management have already set wages according to the contract for certain period and…
Conrad DA, Christianson JB. Penetrating the 'Black Box': Financial Incentives for Enhancing the Quality of Physician Services. Medical Care Research and Review. 2004;61(3, Suppl):37S -- 68S
Hadley J, Reschovsky J. Medicare Fees and Physician's Medicare Service Volume: Beneficiaries Treated and Services per Beneficiary. International Journal of Health Care Finance and Economics. 2006.
Kukreja, P. (2011). Employee Retention of McDonald's. Taken from: http://www.managementparadise.com/forums/human-resources-management-h-r/219372-employee-retention-mcdonald-s.html
Milkovich, G.T. & Newman, J.M. (2005). Compensation. 8TH Edition. Chicago: Irwin.
Inflated Executive Salaries
In the following paper the researcher will analyze the reasons why companies feel CEOs are justified to have inflated salaries. The researcher will first outline the issue of executive inflated salaries, then sum up the arguments of the opposition. In the end the researcher will present his/her own arguments and finally conclude with what he/she gathered through the research.
With the emergent of technological-based environment, companies have mushroomed in the stock market to include internet-based firms to register as corporations, equal to those brick and mortar blue chip companies. The nature of the consumer behavior along with the market behavior, force companies to reconsider their strategies. For this purpose they hire executives to assign the task of changing the direction of these companies around less remain behind in profit making. In pursuing these tactics, they inevitably increased the value of CEOs in the industries. Today CEOs are…
1. Miller, D.J., [10-01-1995]. CEO salary increases may be rational after all: referents and contracts in CEO pay.. Vol. 38, Academy of Management Journal, pp 1361(25).
This is a study on the issue of CEO's salaries and why it is rational to pay them based on their performance. The article also outlines why it is important for the corporations to realize that CEOs should be paid in accordance to their contractual agreement.
2. Brinsley, J. [July 2, 2001]. Boards Tighten Reins on Executive Pay.(Los Angeles corporate executives ranked by pay) Los Angeles Business Journal.
This is a magazine article that outlines the various organizations and their Salaries, pointing out that they are not in accordance with their performance or profit level.
Also, environmental factors as well as leadership can affect overall company performance. Oxford's floundering was due partially to internal control issues that may or may not have been under the direct control of iggins, and also had roots in the problems afflicting the health care industry in general. This is why: "Financial rewards in a fast-changing business environment could undermine a company's ability to build trust and commitment unless management and employees have an honest discussion about their mutual expectations" ("Performance-Based Salaries Don't Always Pay Off,"2003, Harvard Business School orking Knowledge). Finally, it must be remembered that the effects upon the psyche of even a well-compensated CEO who does not receive his or her expected compensation may frustrating but this effect can be even more devastating for a less well paid, lower-level employee.
Performance-Based Salaries Don't Always Pay Off." (26 Apr 2003).
Harvard Business School orking Knowledge. Retrieved…
Performance-Based Salaries Don't Always Pay Off." (26 Apr 2003).
Harvard Business School Working Knowledge. Retrieved 18 Aug 2007 at http://news.com.com/Performance-based+salaries+don 't+always+pay+off/2009-1069_3-997668.html
The amended program integrates compensation, benefits, work-life, performance and recognition, and development and career opportunities, in the total rewards package making it more relevant and flexible for today's employers and employees. Financial remuneration and benefits are expected components of a compensation package. The last 3 mentioned bear further scrutiny.
The more progressive organizations have been incorporating programs that are designed to help their employees do their job more effectively. These businesses have come to realize that when they support their workers -- their workers support them. Examples of work-life programs include on-site daycare and flexible scheduling. Technology and a global economy have forced companies and employees to change their expectations of each other -- and for the most part this has improved opportunities for both.
Studies have shown that employees demonstrate greater satisfaction in their jobs when there is a recognition component to a compensation package. According to Christofferson (2006)…
Christofferson, J, & King, B. (2007). Breaking down the barriers, part 2. Workspan, p. 1-8.
Mercer (2004). Striking the right balance: Total rewards that work. New York:
Broadbanding: Compensation of a "Different Color"
In a 1997 survey reported by the American Federation of State, County and Municipal Employees, more than two-thirds of state government personnel managers indicated they "would like to change their state's salary and classification systems" (http://www.afscme.org/wrkplace/cbr2971.htm). They believed that their governments had far too many job titles, far too few people filling each title, and outmoded salary systems (some over two decades old). But what kind of solution would help companies win that "numbers game"?
Enter "broadbanding," the practice of structuring job classifications to have fewer "layers" than a traditional compensation system. For example, a company that starts out with eight layers compresses those layers to four broader ones, creating a new set of job classifications that grou p
similar skill sets and skilled personnel together. Overnight (or so it can seem), a company's entire compensation picture shifts, its grades change, and the "lay…
Auxillium West - The HR Manager - Broadbanding. 2001, Auxillium West. .
Broadbanding . 2002, American Federation of State, County and Municipal Employees, AFL-CIO. .
Jackson, John H., and Mathis, Robert L. Human Resouce Management. 9th Ed. South-Western Thomson Learning, 2000. pgs. 422-424.
The State is just taking back its rightful property under the contractual obligations of the agreement signed between the host State and the foreign investor who' assets are being seized in the expropriation. Another cause for direct expropriation is the concept that the State will in some way gain financially, socially, or economically from the expropriate assets beyond their value of compensation. If a particular investment can generate more positive results in the hands of the State, it is legal to file expropriation proceedings if the full value of compensation is covered as determine by an international tribunal.
In the European Union, direct expropriations are most common. Based on a common peace and favorable diplomatic relations between the countries within the European Union, there is little need for many investors to worry about unlawful and forceful expropriation, as seen in developing or communist nations. Some investors may invest within a…
Dolzer, Rudolf & Schruer, Cristoph. (2008). Principles of International Investment Law. Oxford University Press.
Edsall, Rachel D. (2007). Indirect expropriation under NAFTA and DRCAFTA: potential inconsistencies in the treatment of state public welfare regulations. Boston University Law Review. Vol 86:931-962.
Hober, Kaj. (2007). Investment Arbitration in Eastern Europe: In Search of a Definition of Expropriation. Juris Publishing Inc.
Merriam-Webster. (1998). Collegiate Dictionary. 1 oth ed. Merriam Webster Publishing.
International Business Machines Corporation known as IBM is an American corporation with headquarters in Armonk, New York. The firm is a computer hardware as well as software manufacturer and marketer. It also deals in information technology infrastructure and hosting. The firm also offers consulting services in fields such as mainframe as well as nanotechnology. The firm started its operations as Computing Tabulating ecording Company (CT) in 1911 after a merger bringing together Tabulating Machine Company, International Time ecording Company and Computing Scale Company (IBM, 2007). The firm adopted its name in 1924, a name that was designated to CT's overseas subsidiaries.
IBM is rated as the second largest employer in the United States in comparison with other firms with 433,362 employees; it also ranked fourth in market capitalization as well as ninth as one of the most profitable companies. Consistent with its large employment base, IBM has established a…
Aswad, E., & Meredith, S. (2005 ). Ibm In Endicott. New York: Arcadia Publishing.
Cable News Network. (2012). Top companies: Biggest. Retrieved February 27, 2013, from www.money.cnn.com: http://money.cnn.com/magazines/fortune/fortune500/2012/performers/companies/biggest/marketvalue.html
Careersvalley. (2011, April 07). IBM Recruitment Process & Stages Explained. Retrieved February 28,
2013, from www.careersvalley.com: http://www.careersvalley.com/featured/ibm-recruitment-process-stages-explained
CIO- Strategist and Executive
Currently, Information technology (IT) is integral in providing business services, and the organization of information on the company. Business process, policies and plans have shifted from the back of the office to the internet. As the business embraces e-commerce and other innovative implementations of IT that assists organizations, leadership in controlling the business information resources becomes significant. The invention of new approaches and the improvement of old ones using the modern information era require strong engagement of information management from the commencement (Leidner, Preston & Chen, 2010).
The efficient, effective, and inventive application of information technology facilitates a high degree of leadership and insight that surpasses the IT functions. esearchers assert that the demand for strong control of information management necessitated the presence of chief information officer (CIO) in executive departments and organizations. The CIO has numerous responsibilities and duties in managing information in the business…
Leidner, D., D.S. Preston, D. Chen. 2010. "An Examination of the Antecedents and Consequences of Organizational IT Innovation in Hospitals." Journal of Strategic Information Systems 19(3), pp. 154-170.
Chen, D., M. Mockler, D.S. Preston, A. Teubner. 2010. "Information Systems Strategy: Re-conceptualization, Measurement, and Implications." MIS Quarterly 34(2), pp. 233-259
Chen, D., D.S. Preston, W. Xia. 2010. "Antecedents and Impacts of CIO Supply-side and Demand-side Leadership: A Staged Maturity Model." Journal of Management Information Systems 27(1), pp. 231-267.
Chen, D., Preston, D.S., 2007"Understanding CIO Compensation through Managerial Discretion" Proceedings of the 1st China Summer Workshop on Information Management, Shanghai, China, July 2
drive decision making about compensation is known as the compensation philosophy of a company. In general terms a compensation philosophy details that reasons and the ways of the choices it has and the decisions taken based on the choices to pay employees and other stakeholders. While such compensation philosophy differs from organization to organization, it company tries to formulate a compensation philosophy so that it is able to attract the best talent available in the market and retain the best talent. The sentiment or the philosophy for compensation is expressed in the settlement or compensation packages given to employees or o the stakeholders (Armstrong & Stephens, 2005).
There can be several types of philosophies that result in several types of compensation. Some companies follow the percentile-based compensation philosophy that is based on percentiles spells out where wages will fall in relation to the regional wage markets and comparable to the…
Armstrong, M., & Stephens, T. (2005). A handbook of employee reward management and practice. London: Kogan Page.
European Monitoring Centre on Change. (2007) (pp. 5-15). Dublin. Retrieved from http://website: www.eurofound.europa.eu
Gerig Meyer, J. Just wages.
Tesco.com,. (2015). Report of the Remuneration Committee. Retrieved 25 July 2015, from http://www.tesco.com/investorInformation/report97/accounts/page3.html
International Compensation Package for Expatriate Executives Assigned to Mexico
This memorandum is in response to your request for a comprehensive and effective international compensation package to encourage the employees selected to take the assignment to facilitate the launch of the company's new operations in Mexico. The following recommendations are based on 10 equal expatriate positions with a domestic equivalent salary of $80,000. Notwithstanding these equivalencies, the research to date confirms that "one-size-fits-all" compensation packages may be less effective than individualized approaches that take executives' current life situation into account (Divakaran & Mani, 2012).
It is reasonable to suggest that some of these 10 executives (particularly those who are single) will require little or no encouragement to accept the assignment to Mexico, viewing it as a plum assignment given the lower cost of living and amenities that are available there (Cost of living comparison between Mexico and the U.S., 2015). By…
Cost of living comparison between Mexico and the U.S. (2015). Numbeo. Retrieved from http://www.numbeo.com/cost-of-living/compare_countries_result.jsp ? country1=Mexico&country2=United+States.
Divakaran, A. & Mani, M. (2012, September/October). Best practices for meeting manufacturing's global talent challenge. Ivey Business Journal Online, 37-38.
Segal, M. A (2009, December). Per diem arrangements and accountable plans. The CPA Journal, 73(12), 38.
Stroh, L. K. & Black, J. S. (2009). International assignments: An integration of strategy, research, and practice. Mahwah, NJ: Lawrence Erlbaum Associates.
This has certainly been the case with KFC and its burgeoning operations in many Asian countries where cultural factors that can affect business operations are particularly pronounced. For example, according to Briscoe and Schuler (2004), "In a highly successful strategy, KFC employed a first-generation Chinese-American to return to China to establish its chicken restaurants. These international employees may not be placed on a full expatriate compensation package, but rather may receive a form of hybrid compensation, with some aspects of the package received by a traditional expatriate and some aspects of local employees" (p. 219). Even though these KFC expatriate executives may not receive the full measure of the compensation package offered counterparts in other countries, these assignments are widely regarded as being important to achieving longer-term career goals, professional development and providing valuable work experience in cross-cultural settings (Konopaske et al., 2009).
Evaluate the monetary and nonmonetary programs…
Briscoe, D.R. & Schuler, R.S. (2004). International human resource management: Policy and practice for the global enterprise. London: Routledge.
Glover, J., Rainwater, K., Jones, G. & Friedman, H. (2002). Adaptive leadership (part two): Four principles for being adaptive. Organization Development Journal, 20(4), 18-19.
Konopaske, R., Robie, C. & Ivancevich, J.M. (2009). Managerial willingness to assume traveling short-term and long-term global assignments. Management International
Review, 49(3), 359-360.
These figures dwarfed what other big businesses paid for discriminatory practices. These businesses included Texaco, Inc.; Shoney's, Inc., Winn-Dixie, Stores, Inc.; and CSX Transportation, Inc. Critics saw Coca-Cola's settlement as signaling a major breakthrough among big businesses as coming to terms with diversity in the workplace (King). ecause the company has been a leader in many areas, these critics regarded it as setting an example of greater openness to promotions across races of employees (King).
Settlement terms included $23.7 million as back pay; $58.7 million as compensatory damages; and $10 million as promotional achievement award fund distributed to the complainants. A remaining $20 million went to attorney's fees and $36 million to the implementation of internal program reforms. Coca-Cola would also create an external, seven-member task force to insure that the terms were complied with and to oversee the company's diversity efforts (King).
According to Social Networks. - Connections in…
Bland, T. (1999). Equal pay enforcement heats up. 4 pages. HR Magazine: Society for Human
Bronstad, a. (2001). EEOC alleges Beverley Hilton discrimination. 2 pages. Los Angeles
Business Journal: CBJ, LP