Executive Bonus Schemes

The aim of this essay is to study the reasons behind the existing controversies behind Executive bonus schemes and whether this method should be a process for rewarding people or talent in order to retain them in the organization or not. From this perspective the essay studies the various schemes of bonus on the basis of examples from literature which have created controversies. There are many reasons behind these controversies each of which needs to be identified if a retention as well as talent within the organization needs to be maintained and retained for success of the concerned organization. The structure of the essay is to provide a framework in the realms of bonus schemes along with expectations of the employees. The effect of the same also needs to be studied in accordance to the organization perspectives. The essay concludes with a summary of the results identified in the essay.

Controversies behind Executive bonus schemes

It has been believed by most cultures within organizations that the current scheme of bonus is such that it is unfair, promotes such terms which are short and results in that kind of performance which is completed distorted. This means that executive bonus schemes give rise to controversies. From this it becomes evident that there are controversies but what the reasons for the development of these controversies.

According to a report by Bryan Gould, it was evident that he had raised the facts and figures developed out of the bonuses by Eyebrows and ire contributing towards remuneration of packages that are big and paid to those companies and executives which are leading in the market today. It has been evidently said by most directors of institutions as well as organizations that if talent has to be attracted then such salaries are to be given that match with the salaries existing in the world in other organization of the same group or type. The global economy Is actually wonderful and is such that it requires to push salaries at the top in order to make them compete with that which is present in the world. But here it cannot be forgotten at the same time that the wages for the employs which are ordinary are needed to be paid in order to cater to the existing benchmark which is determined by those wages of economies which are of the lowest order in the available market. If an organization thinks that it is a need which is supposed by all aspects to pay the top executives 50 times more the salary of the employees which are skilled then it will completely be a nonsense of self serving kind by a circle which is small and completely charmed by its very own notion and sets forward the right of its own rates of pay. In addition to this, the culture of bonus seems such that it emerges from unscathed notions beginning from the objectionable aspect of recession. This happens basically because the production by the inequities is not only scandalous but also completely remunerated in terms of the deficiency that needs to be performed from the point of view of performance of the economy. It should be noted here, that the performance of noticeable bonus features that which is peculiar to the business culture of Angle American having faith which is quasi religious and infallible to the forces of the market dealt with a blow which is implosion from the last years. The cases against such aspects remain sound employed by the principles and rather have applicable preferences which are ideological. The attitudes which are promoted by the executive bonus schemes are such that they result in bringing about such attitudes which are completely antithesis of the needs that are expected. The theory behind this controversy is that if the executives have a fair chance in the game then they will definitely focus on trying harder and give a performance which is better. The practical evidence is that the schemes of bonus encourage the deficiencies bedeviling the performance of economics over a stretch of time. A focus is engendered on the expenses which are short term over those expenses which are long term for the enterprise. The particular term namely, short termism is that word which is peculiar to the economies of Anglo American affliction. Further, it can be explained that these lead to cutting the cost as well as taking over the profit for a period of time which is short and alternative to the need as well as investment resulting in building the capacity which is new and improves the production along with the perspective which are strategic. The next controversy, arises from the schemes of bonus which completely spoil the performance moving beyond the executives capacity underlined by various conditions of macroeconomic criteria because of which they wither have to be applied to an irrational field or they have to be completely discounted.

The result of this reason that the boards make the judgment broader and better such that they constitute the performance which is good in understanding the circumstances which are current without even referring to the factors of any kinds that really have been determined by any kind of performance or even such fictitious stories which evaluate the performance basing itself on the data which is accurate as well as measured through all kinds of aspects. Here, another reason can be opted for which is the availability of substitutes which is offered by the set criteria and has to be differentiated based on the merit.

If the first course is taken, then the alleged performance measures the reflection of all results in such a way that the board feels strongly for alienating themselves from the risk involved with several aspects of schemes of bonus. The alienated risks are the story behind the story of the bonus reported since various weeks. The second course, pretended to measure the accurate performance of the criteria that is quantitative, outlines a danger for the executives who focus on just the criteria of bonus. This case can completely be changed if there was no notion of scheme of bonus and instead there exists a complete judgment of performance which is sensible.

The issue then comes into being is of the bonus being either paid or not and if the bonus is paid then of how much amount will it be. Along with these notions, the relationship that exists between governing as well as management completely becomes destructive due to the existence of bonus schemes. Their do exist certain performance measures which are specific to the percentage points and in addition to these bonuses there also exists a feeling of engender along with resentment which is unfair making it very hard to be conducive towards those management human resources which are good human resources in association to these bonus schemes.

A better practice from all stances would be to find economies which are emulated and are also owned by the complete framework of the economy. Those executives which are at the top are paid that rate which is proper for the kind of work that they do. This helps them to deliver a practice which is completely proper to the rate of performance as well as identifies the issues associated with the performance. A performance issue is dealt with which is less than satisfactory. A performance on the other hand, which is completely exceptional should be provided with such rewards which are beyond the duty of call and serve to be genuine towards the existence of bonus. The requirement that next arises is that the contracts of employment should be remunerated and negotiated again. The aim behind this negotiation should be to change or remove the effect which is deleterious and is current to the practice of the organizations.

Conclusion

From this point of view, it becomes evident that no matter what the bonus schemes may be, they always create unfair means in the framework of the organization which results in destroying the effect of practice which is completely deleterious and also results in spoiling the structure of the organization. The aim is thus to provide a structure which is completely without the method of bonus schemes required to reward or retain talent of any kind within an organization. Instead, the approach should be such that there is equal distribution of wealth to all individuals or employees of the organization and none of them result in feeling that there have been unequal opportunities for all in the framework and that there has been a behavior of biasness leading to a complete disqualification of motivation and resulting in something that destroys the human behavior within the structure of the organization. The structure may be contemporary but it is too modern for people to understand that they will not be appreciated for that which is not a part of their job and instead others will be appreciated for that for which they are already been paid the salary for and getting an extra appreciation in terms of bonus schemes is not fair.

References

Andreassen, TW., & Olsen, LL., 2008, pp.309-28, The impact of customer' perception of varying degrees of customer service on commitment and perceived relative attractiveness, Managing Service Quality,

Ballantyne, D., 1996 ,pp.3-6 . Guest editorial: Getting your way in business, Asia-Australia Marketing Journal,

Berry, LL., 1996, pp.6-8, Guiding and inspiring performance through a service strategy, Customer Service Management Magazine.

Davidow, WH., & Uttal, B., 1989, Total Customer Service: The Ultimate Weapon, Harper and Row Publishers, New York.

Deshpande, R, JU., & Webster Jr, FE., 1993, pp.23-27, Corporate culture, customer orientation, and innovativeness in Japanese firms: A quadrad analysis, Journal of Marketing.

Grönroos, C., 2001, Service Management and Marketing: A Customer Relationship Management Approach, 2nd edn, John Wiley & Sons, Chichester.

Hart, CW., & Johnson, MD., 1999,  pp.9-19, Growing the trust relationship, Marketing Management, Spring.

Heskett, JL. & Sasser Jr, WE., 1997, The Service Profit Chain, The Free Press, New York. 

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