...the reading that I also found interesting was Incentive Pay. The article I found further discusses this topic by weighing the benefits and drawbacks of incentives. What drew me to read this particular article was its title “Why Incentives are Irresistible, Effective and likely to Backfire” This article discusses that though incentives are irresistible to employees and are effective in increasing job performance, it sometimes has negative consequences. For example, the authors states in the article that “Ken O'Brien was an NFL quarterback in the 1980s and 1990s. Early in his career, he threw a lot of interceptions, so one clever team lawyer wrote a clause into O'Brien's contract penalizing him for each one he threw. The incentive worked as intended: His interceptions plummeted, but that's because he stopped throwing the ball.”(Heath & Heath 2009) Another example this article describes is Paul Stiles experience as a new trader at the venerable investment bank. “Merrill Lynch wanted Paul to trade complex international bonds in volatile markets. He tried asking advice of the seasoned traders, but they ignored him, a minute spent helping Stiles was a minute spent not adding to their monthly bonuses. It surely never dawned on the person who set up Merrill Lynch's incentive system that the traders bonuses would make training new employees impossible.” (Heath & Heath 2009). Prior to reading this article, it never occurred to me that incentive pay can have negative implications and this...
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...infrastructure development. 2010. Nr. 5 (24). Research papers. CRITICAL ISSUES FOR COMPENSATION AND INCENTIVES MANAGEMENT: THEORETICAL APPROACH Ramunė Čiarnienė, Milita Vienažindienė Kaunas University of Technology, Vilnius Co-operative College For most people, pay is a primary reason for working. Indeed, compensation is at the core of any employment exchange, and it serves as a defining characteristic of any employment relationship. The study focuses on critical points of compensation and incentives management. The fundamentals of a good incentive program include the elements of vision, potential, communication and motivation and can be realized if incentive promises are fulfilled – by both employer and employee. The aim of the paper is to identify the most important attributes of compensation and incentives management. Research method is the analysis and synthesis of scientific literature, logical, comparative and graphic representation. On the base of analysis, authors of this paper present the model of incentive system for positive employee attitudes and behaviors. Keywords: compensation, employees, incentives, management. Introduction Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. Pay may be received directly in the form of cash (e.g., wages, merit increases, incentives, cost of living adjustments) or indirectly through benefits and services (e. g., pensions, health insurance...
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...Importance of alignment [300 words]: The role of incentives in securing execution Employees are the agents of the firm’s owners since they take actions or make decisions that impact the payoff to the owners. The difficulties in the agent-principal relationships arise when the objectives of principal and agent are different and the actions taken by the agent or the information possessed by the agent are hard to observe. Employees care about the job in terms of the value the job generates for themselves. Thus providing the right incentives to employees would secure execution of the firm’s plans to meet the firm’s objectives. There are financial and non-financial incentives. Non- financial incentives are social and moral incentives. Which incentives are appropriate depends on the objective of the company. Since motivation comes from within the employees, the personality, needs and interest of each employee determine the right incentives that will influence employees to self motivate and produce the best work possible that will contribute to the firm meeting its objectives. Reward and recognition is concerned with the range of practices an organisation undertakes (financial and non-financial) to compensate employees, maximise employee engagement and encourage behaviours that lead to organisational success. A good reward and recognition system should motivate employees while aligning their goals with those of the organisation. Such a system involves balancing employee remuneration...
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...conclusion can be drawn. Because of the national concern over the decline in American productivity standards, Garin and Cooper believe that the morale-productivity relationship is an area ripe for further experimental research Downsizing, the planned elimination of positions or jobs, is a phenomenon that has affected hundreds of companies and millions of workers since the late 1980s. While there is no shortage of articles on "How To" or "How Not To" downsize, the current article attempts to synthesize what is known in terms of the economic and organizational consequences of downsizing. We argue that in many firms anticipated economic benefits fail to materialize, for example, lower expense ratios, higher profits, increased return-on-investment, and boosted stock prices. Likewise, many anticipated organizational benefits do not develop, such as lower overhead, smoother communications, greater entrepreneurship, and increases in productivity. To a large extent, this is a result of a failure to break out of the traditional approach to organization design and management--an approach founded on the...
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...Employee Relations: Incentive Plans Paper Katrina J. King MGT/431 - Human Resources Management University of Phoenix July 19, 2011 Dr. Cassandra Molavrh Employee Relations: Incentive Plans Paper Money motivates employees. Cold hard cash. Cash money will always and forever be the most important factor in motivating employees. However, money is not the only solution. Developing solid incentive techniques for Texas Sports Beat require the organization to take a deeper look within the organizational culture to find ways to offer and introduce the ‘Incentives Plan Program.’ “How can the organization attract and keep quality staff ensuring everyone is involved and interested?” As mentioned in the above paragraph, cash is not always the answer and in countless cases not even the best response. According to the Law of Individual Differences; People differ in abilities, needs, personality, and values. Thus people react to different incentives in different ways. Because TSB Sports, is a small organization, it cannot afford to pay salary wages to employees. The organization employs contract workers to perform specific tasks. For an example: A staff photographer would be paid hourly wages per game worked.. Usually, three to 12 games per week (home games only). Photographers are paid by the hour, no matter staff, or freelance. Photographer’s incentives are opportunities to take images of players and coaches...
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............................................... 4 3 References .................................................................................................................... 9 PQHRM/KDY/12 Page ii Module -4 Compensation Management 1 Question 1 WHAT ARE THE MANAGEMENT ISSUES FACED BY THIS COMPANY? Inability to achieve the 40% of production rate. The company’s initial target was to achieve 40% or above increase in production. At the first 3 months they gradually reached up to 32%. There after it was dropped up to 20% during the latter three months. Increase of the lower quality products during the 6 months. The lower quality and rejects rate was increased by 10 -15% during the 1st 6 months of implementation of the new incentive scheme. As Blue Flowers (Pvt.) Ltd is engaged in manufacturing of high quality artificial flowers to both local & international market quality of the product is a very critical factor. Therefore this considerable rate of quality drop has a large effect on its profit. Demotivation among employees. Due to the...
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...danger of an Arab spring? * Could generalize this into something like * What indicators point to a social uprising looming? * Could focus on certain political, social or economic factors in general * And perhaps compare this or look to what lead to the uprisings in other countries What is or should China do about its aging population? * Could do a comparative study with Japan? Other countries. Upliftment of the poor – can SA learn from China? * Are there better countries to learn from? * Do comparative study between different countries What are African countries doing/not doing (strategies, policies) to derive long-term benefit from investment from China * Could generalize this to * How can emerging? countries derive long term benefit foreign investment from developed countries * Could focus on South Africa and China’s relationship * Could look at all countries China works with BGS or ECO How do SWF’s benefit the welfare/growth of a country? * Could focus on UAE’s use of SWF’s * Could compare it to how other countries use it ECO Do leading indicators influence confidence indicator? * Could look at whether the different indicators influence each other? Sentiment which increases leads to better leading which leads to better sentiment etc Something with Behavioural Economics/Finance (COULD BE FINANCE) Germany vs Austria : Organ Donor – Ticking the box (TED video) Could look at how this can...
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...action 4. Which one of the following is not a benefit to the employer when offering an ESOP? Student Answer: - maintains a stable work force - owner can sell stock to a friend - results in a dilution of value of the stock - ESOT can borrow money under favorable conditions 5. In contrast to compensation systems in the private sector, those for government employees are less likely to include use of Student Answer: - wage surveys - job descriptions - job evaluation - financial incentives 6. Which one of the following statements is not true regarding a defined contribution plan? Student Answer: - most pension plans are defined contribution plans - crucial to a defined contribution plan are investment and management skills - employers assume the investment risk - most plans have less than 100 participants 7. Which of the following is not true about a well-designed incentive scheme? Student An...
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...though, that suggest there is more involved than simply throwing money at top performers. Despite these constraints, many authorities suggest that pay-for-performance programs have a lot to offer organizations seeking to identify better ways to improve employee performance. Pay for performance is not a new idea. Organizations all over the world use this type of system when offering bonuses based on predetermined results or commission. Pay-for-performance programs, also known as incentive pay or merit pay, are a solid approach to rewarding top-quality performance by employees in many types of organizations including healthcare settings. Pay for performance is a motivation concept in human resources, in which employees receive compensation for their work based on the level of reaching certain targets individually or with their team, department or company. The term is often referred to when one is addressing the topic of variable pay based on performances. Unfortunately, the perception of such incentive pay approaches is...
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...Entertainment, a fortune 500 and one of the largest casino entertainment companies had decided to move away from being a product based to more of a strategic marketingoriented company whereby tailoring its products and services based on customer data and creating a customer focused reward program. At the heart of Harrah’s reward program are its employees who would ultimately carry it out in the field. Therefore, to motivate and get employees energized, Harrah’s had instituted an incentive pay plan in order to rewardemployees in all its properties for improving overall customer service metrics. Harrah’s goals behind the said incentive plan were to implant a competitive mindset in its employees as well as to show that the employees are at the core of the company’s strategic customer focus plan. Through Harrah’s strategic customer reward program, the company gained the market share; however, it is not quite at the expected level. As such, employees in many properties did notget the incentive payout regardless of their tireless effort. This resulted in employees feelinglike their hard work was not recognized and that the management kept raising the bar on customer service goals. Harrah’s head of Human Resources was concerned that employeescould ultimately become discouraged which would result in a failure of the company’s new strategic plan on improving customer service. Section II a - Strengths and weaknesses of Harrah’s gain -sharing program Harrah’s gain -sharing...
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...in that variation is the healthcare setting itself. Another key determinant is the design of the pay for performance incentive, such as what aspect of performance is awarded, as well as the size of the reward. Studies have also shown that public reporting initiatives, or requiring hospitals and physicians to provide data on their own performance, have been effective in reducing preventable injuries in the hospital setting. (Leake 2010) There are two types of pay-for-performance initiatives that have been implemented in recent years: processed-based performance measures and outcome-based performance measures. Processed-based performance measures indicate whether protocols were followed in specific situations. For instance, whether or not patients with acute myocardial infarction received aspirin upon arrival to the emergency department is a process-based measure. Outcome-based performance, however, is measured based on patient outcomes, mortality rates, for example. Studies have shown that patients gain the most value from pay-for-performance initiatives in the hospital setting. The two main studies corroborating this claim are Maryland’s Quality-Based Reimbursement Program (QBRP) and the Center for Medicaid and Medicare Services’ study entitled High Quality Incentive Demonstration (HQID). In 2008, Maryland launched its QBRP, which provided financial incentives (both rewards and penalties) to Maryland hospitals in an attempt to encourage improvements in...
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...Do you think that Keith was justified in insisting that the job, not the person be evaluated? Explain your answer. I believe Keith was extremely justified in insisting that the job, not the person be evaluated. As the Chairperson of the company’s job reevaluation committee he was responsible for evaluating jobs in order to determine if the jobs are still viable and if they need to be increased to better achieve the company’s business strategy. When Keith sent out the jobs list to the committee members Bob and Rita both knew what jobs were going to be discussed during the meeting but because they had personal feelings toward the employee they felt though the person and not the job should be considered. After Keith was so rudely interrupted by Bob to talk about Geneva who worked as a receptionist for the company for more than 12 years, and was liked by all the executives for her performance and demeanor. Keith calmly reinstated to Bob that they were there to talk about the three receptionist’s jobs and not the person. The three new receptionist’s positions were all set up at the same pay band, which Bob and Rita thought Geneva should be paid more money for her time and service to the company. What Bob quickly forgot is that the purpose of the committee is to determine the value of the positions and not talk about the employees, which could be conducted through other company channels. Keith could have been brasher as the Chairperson and excused Bob from the meeting...
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...------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- MASTER IN BUSINESS ADMINISTRATION ------------------------------------------------- (GENERAL MANAGEMENT) ------------------------------------------------- ------------------------------------------------- MGT6033: COMPENSATION & BENEFITS MANAGEMENT ------------------------------------------------- ------------------------------------------------- COURSEWORK / ASSIGNMENT I ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Prepared By: Lim Chee Seong (IC: 661007-08-6109) ------------------------------------------------- ...
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...EMPIRICAL RESEARCH When do incentives work in channels of distribution? David I. Gilliland & Stephen K. Kim Received: 31 December 2012 / Accepted: 1 November 2013 / Published online: 7 December 2013 # Academy of Marketing Science 2013 D. I. Gilliland Aston University, Birmingham, UK B47ET incentive offers because monetary rewards offset the agent’s risk and unpredictability of its income stream (Jensen and Meckling 1976). Despite general support for this logic, researchers have been puzzled by a substantive dilemma: Incentives often do not work. Benabou and Tirole (2003); Bouillon et al. (2006), and others have found that agents do not always respond positively as incentives increase. Other findings indicate that monetary incentives are sometimes demotivational (Ryan and Deci 2000), lead to dysfunctional activities by rewarding the wrong behavior (Baker 2002; Oyer 1998), are an inefficient control mechanism (Akerlof and Kranton 2005), promote shirking rather than compliance (Gibbons 1998), and are unpredictable under turbulent industry conditions (Prendergast 1999). The idea that incentives often do not work has been substantiated in the practitioner literature as well. Kesmodel (2008) reports in the Wall Street Journal that even dominant firms find it difficult to structure effective incentive portfolios with the resellers of their products. These and other findings motivate our research question: When do incentives work in a channels of distribution ...
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...Research Project IV Nicole L. King Baker College HRM315: Evaluating Human Resources Tae Dawson June 13, 2012 Abstract This purpose of this research project was to find out how well BWI HR is meeting the needs of its employees. Fifty surveys were collected and reviewed. One each survey were eight HR services. The HR services are Performance Appraisal, Wage & Salary Administration, Incentive Pay Program, Internal Job Posting, Healthcare Insurance, Technical Training, Career Counseling/Development and Flexible Work Schedule. Each of the HR services had a rating scale to see how important and satisfied the Target employees would rate them. There were three HR services that showed the largest gap between importance and satisfaction. The incentive pay program, performance appraisal system and career counseling and development all showed large negative gaps. The incentive pay program should be changed from an individual-based program to a team/group-based program. The performance appraisal system should evolve into a “social network” type of performance management system. This type of social performance management system will bring many advantages, including empowerment. Finally, the career counseling/development programs should see a small expansion and reviews of the eligible degrees, adding certificates, increasing the tuition reimbursement amount and adding mentoring programs. These improvements should be implemented to improve the HR services, our people and...
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