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Executives and Motivational strategies Assignment PDF

   

Added on  2021-06-17

6 Pages1263 Words64 Views
Motivation

Literature ReviewIntroductionProvided part of report covers viewpoints of various authors on executive compensationand equity theory by considering relevant literature. Further impact of equity theory onperformance of executives and Motivational strategies for employees has beendiscussed to resolve given case issue.Executive compensation and equity theoryExecutive compensation is believed contravened entirely in comparison to justicemethod within the equity theory. Although; the same is seemingly “fair” in contrast toCEOs of similar organizations who are completely in lopsided present job Market.Equity theory is one of the approaches which compare the ratio of output and input orthe same can be expressed as the reward you received after providing the specifiedquality or amount of effort for accomplishing your obligation (Pepper and Gore, 2015).Further, the same is being compared with your coworker, family member or any otherperson. In case the result of ratios which have been derived are equal or equivalentthen it represents the existence of equity; however, in case, the ratios are not equalthan the same is referred as under-equity or over-equity. In case of under-equity, theresults make believe the employee that the reward is not in order with the effort which isbeing made by you as the referent point is receiving even after making less effort thanyou have made. Guay, Kepler and Tsui, (2017) asserted that in over-equity the outcomereceived by the employee is more in comparison to the effort made for same andreferent point person is attaining less even though the effort put by him or her in morecomparatively.Impact of equity theory on performance of executivesThere is a serious question which has been raised regarding the base salary, incentivesand benefits for executives and their implications as all these are main variants ofmotivation. The most important concern regarding the high pay level to chief executivesis they might be supported for taking the business decision which is beneficial for themby ignoring company’s needs so that they can achieve performance goal which isneeded to get the incentive pay (De Vaan, Elbers and Di Prete, 2018). This is

especially for the incentives which are for short-term. For instance, to attain largebonuses executives might make up short-term profits which cannot be continued so thatthey can leave the organisation prior to long-term financial problems are exposed. In this aspects Rau (2017) states that the existence of over and under equity leads tode-motivate the employees as the same and might have a negative impact on efficiencyand performance of employees. In case an organization enhances the bar for executivecompensation, then the other companies initiate to reassess the manner in which theysee the bar of executive compensation. If executive compensation is intimatelyconnected with the total revenue of organization for the year and it is possible todistribute the same to employees than moral and work effort should see theenhancement. Usually, the positive motivational consequence is connected withcompensation pay. Further, evaluation of performance assists in ascertaining themanner in which annual bonuses of the company should be distributed. In words ofEdmans, Gabaix and Jenter, (2017 if in a case an employee makes an optimum effortand has a positive effect on the productivity of company than same he should beprovided with the compensation rightfully. Further, in case if the employee believes that system is fair than the same will develop apositive environment in the organization and will boost up the morale of employees. Thegovernment has the very important function of controlling executive compensationthrough regulatory authorities for various types of companies (Newton, 2015). The perks and bonus slab are developed in accordance with provision set by thegovernment. Further, if the government makes it mandatory to provide the basis ofperformance slab measurement than employees could be assured that equal behaviourhas been done with all the employees and same will motivate them to focus on theirwork. It is because; the norms and regulations relating to compensation of chiefexecutives are formed after considering the provisions provided by the governmentrelating to the executive compensation. In case government provides details regardingthe base in accordance with which compensation is being decided than employees willbe able to assess whether they are treated fairly or not.

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