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Effect of motivation on employees
Effects of motivation on employees
Effects of motivation on employees
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Assignment Unit 3
-Is it ethical for CEOs to be paid so much more than other employees? Yes it can be ethical for CEOs to be paid so much more than other employees as long as the company’s salary scheme has been discussed and approved by stakeholders, ethical accounting practices is used and make ethical decisions using audited financial measures including earnings when computing
Compensations to top executives. The big companies need talented CEOs to get them sometime you need to attract them with a big salary, therefore it is up to Board of Directors and Stakeholders to look at what CEO is bringing at the company as net profit and judge if the salary is excessive or not. Of course we all know that it is a collective effort of great CEOs
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This practice doesn’t use a valid reward distribution system because a valid system uses a kind of survey through a Satisfaction questionnaire filled by all staff, so when there is a big gap in the salaries between CEOs and other employees the management intends to hide compensation for Executives. Companies have to make a business decision on how they will reward their executives
Should companies be considering ways to reduce the gap to improve the overall moral of their employees?
Yes companies should consider ways to reduce the gap to improve the overall moral of their employees because all of them play a role in the success and effectiveness of the company even if CEOs are more responsible for the success of the company. A valid reward distribution system and Performance-Based Reward Distribution Method should be applied. Because reward distribution systems have major effect on the ability of organization for employing, generating and maintaining motivation in potential employees and consider as the main reason of access to great
Executive compensation has been studied for many years. While the average person probably does not think about it on a daily basis, it is necessary to watch trends. Tracking the amount of money they make as well as the bonuses, stock options, and other benefits shows how these executives are making such high rates of pay compared to the ordinary worker. Tracking how much an executive makes began in the 1930’s. Since this time not only has it been tracked but there have been many changes in the type of tracking, the tax laws and what is available as compensation. This paper highlights the changes that have occurred since the early 20th century until today and changes that still need to occur.
In a business or a workplace, it is essential for the organization, which consists of the employers, the managers, and their employees, to work towards reward programs within the human resources in order to create a healthy and cordial work environment and most importantly, to efficiently achieve business’ goals. In Carol Patton’s (2013) article, Rewarding Best Behaviors, she explains the importance of several companies that are beginning to recognize their employees, not just for the end-results, but for reflecting good behaviors towards the business’ values, such as demonstrating creativity on certain projects, problem solving towards certain issues, and also collaborating with fellow co-workers. Patton stresses that these reward programs could help suffice the overall being of a company as long as the rewarded behaviors correlate with the corporate strategy. Patton expresses that some things human resources must comprehend include “how its company creates success, what drives its business strategy and what behaviors are needed from employees to achieve that success” (Patton, 2013 para. 15). Moreover, the employee would be reflected as a role model for others and perhaps influence them to demonstrate comparable behaviors.
The above examples of pay show that the more skills, experience employees are with the organization the more they are compensated. Organizations would benefit by utilizing the same practice’s Disney extends to their workforces. For those businesses whose primary purpose of their plan is to only meet compliance requirements could greatly benefit by developing a comprehensive benefit plan. This could help increase their return on investment. The value I believe a business may gain from Disney’s compensation plan is to appeal to competent workers, to maintain those workers, and to motivate workers to direct their energies towards achieving the goals of the organization. Companies can set up policies to conduct a market study on a regular basis to implement a real performance appraisal system and then work on retaining good employees and elimination of poor performing workers. By following Disney’s lead of in obtaining those who best fit their company’s culture and supporting the company’s Mission. To guarantee that the pay structure is externally competitive, a pay survey should be shown. The results of a survey to be valid, the market pay data must be from the relevant labor market for each benchmark job. I would advise that a survey of regional and global pay data should be collected from the company, because for example, most of the office support, HR and operations jobs will be filled by local applicants. A job analysis is the procedure of reviewing jobs in an alike business. The result of this process is a job description “that includes the job title, a summary of the job tasks, a list of the essential tasks and responsibilities, and a description of the work context “(Burke, 2008). A job description consists of the knowledge, skills and aptitudes necessary to do the job. A job evaluation is the process of adjudicating the comparative value of job within a company
CEO compensation has been a heated debate for many years recently, and it can be argued that they are either overpaid or that there payment is justified by the amount of work they do and their performance. To answer the question about whether CEO compensation is justified it must be looked at by the utilitarian viewpoint where the good of many outweighs the good of one. It is true that many CEO’s are paid an exorbitant amount of money; however, their payment is justified by the amount of money that they bring back to the company and the shareholders. There are many factors that impact the pay that the CEO receives according to Shah et.al CEO compensation relies on more than just the performance of the CEO, there are a number of factors that play a rule in the compensation of the CEO including the fellow people who help govern the corporation (Board of Directors, Audit Committee), the size of the company, and the performance that the CEO accomplishes (2009). In this paper the focus will be on the performace aspect of the CEO.
However, it is clear that the company created this dilemma since its role is to make a real impact for its beneficiaries as well as satisfy the public by providing verifiable numbers yet they ineffectively performed this duty. The company revealed a $154 million in revenue in 2012 with a record of about $2 million going to salaries of 10 senior executives and about $21 million paid to their 248 member staff. This was bound to raise eyebrows on the expenditures of the company thus the ethical dilemma of how to justify these salaries as well as keep rewarding the talent of the
Power and Exploitation: Abuse by the Wealthy Are CEOs paid too much? Do the wealthy have unfair power? To put it bluntly, yes. CEOs make ridiculous amounts of money. So much, in fact, that many people have a hard time understanding how much they really have.
In order to answer the research question, I collected data to define and actualize the variables of interest. The first order of business was to collect data on the dependent variable, CEO total compensation. After selecting thirty-seven of the top Fortune 100 companies and identifying each company’s CEO, I was ready to begin collecting. The Securities and Exchange Commission’s EDGAR system provided a perfect source for the best identification of each CEOs total compensation. Every company must provide an annual proxy statement, labeled DEF 14A, which contains a summary compensation table of the top five earners. In every company examined, the CEO happened to fall into that category, as expected. Total compensation includes salary, stock incentives, bonuses, and other compensation. To simplify the data, I converted CEO compensation in millions of dollars. Although the summary compensation tables include earnings from the last three years, I chose the total compensation paid to each CEO at the end of the 2015 fiscal year.
Since the beginning of time, there's been a over dweller, a monarch, a king, a CEO. A higher power has always been a factor in every corporation. CEOs are today's high archey in the business world; a chief executive officer is the highest rank in a company ultimately responsible for managerial decisions. Often given the highest salary you can imagine; a CEO receives their compensation from a variety of sources, such as their base salary, bonuses, benefits, and long term incentives (Walsh). Although legal statements of disclosure remain in dispute, the pay disparity between CEOs and employees has drawn significant attention from the media and has created numerous statistics and charts, such as, in his article The CEO Backlash,
Reward and recognition has to be promoted for small and large achievements. An effective reward’s program keeps employees engaged, dedicated, and committed to the organization.
Reward systems have been evolving and growing throughout the years, but there are many types that have always been there. Base pay is the most common, which is an employee’s base wages and salary that they are paid on hourly, weekly, monthly, or annually (Luthans, 2011, p.94). Merit based pay is another type of incentive, which rewards and motivates an individual to perform their jobs to the standards of their employers. According to the text Organizational Behaviors, by Fred Luthans, there are three other options for paying an employee for their performance: individual incentives pay plans, using of bonuses, and the use of stock options. Individual based pay plans are based on the employees output and/or quality. Some organizations use bonuses as incentives to their employees. These are offered sometimes as op...
A well planned and implemented, vital form of employee compensation can be an effective motivator and contributor to employee performance and job satisfaction which would ultimately benefit the company. It is reasonable, considering that it just makes sense that paying an executive more for better performance is motivational to the executives (Ferracone, 2010). The executives have to maintain a very prestigious lifestyle that fits his status quo and job and this takes more money than what his/her employees make. The CEO/executives has the final duty of all decisions made for the company and have the responsibility towards the company’s reputation and performance.
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.
There is considerable debate over merit pay and the effect it has on employees within an organization. Psychologists believe merit pay is related to the incentive theory of psychology; people respond to rewards and with the proper motivation, it increases performance (Cherry). Employers consider merit pay an effective tool and a form of competition strategy for motivating employees to achieve positive performance outcomes. Many employers ignore the fact that incentive plans may motivate some individuals while others have high work ethics and do not need motivation. The intent of this paper is to discuss merit pay used by companies, the motivational factors on employees to reach high achievement, and the challenges that employees face due
The foundation for effective job performance and compensation system can be traced to effective job analysis process. Fundamentally, a job analysis should consist of a thorough examination of the job 's duties and knowledge, skills, abilities, and qualities that are required in order to be successful in a specific position, upon which appropriate rewards or compensation can be determined. For many perspectives, jobs are usually made up of requirements and rewards, where rewards may be regarded as a major recruitment strategy for motivating potential employees in order to influence them to stay the organization for a longer period as well as enhance their performance. The most common or basic form of rewards which attracts employees is extrinsic
and whether the decision and distribution of organization resources or rewards is fairly done (citation needed) as it was preplanned according to the criteria. Employees like the fair distribution of rewards and resources and as a result they get emotionally attached to the organization and gives their best input to organizations (Cremer et al., 2004).