HOW TO DETERMINE LOGICAL 꽁 머니 카지노 COMPENSATION
By PASCUAL BERRONE, JORDAN OTTEN and LUIS R. GOMEZ-MEJIA
A version of 꽁 머니 카지노 article was originally published by IESE Insight (http://insight.iese.edu)
Determining logical 꽁 머니 카지노 compensation is a tricky blend of art and science. Culture, country, history, social responsibility and, of course, the quest for company success all play a role in structuring 꽁 머니 카지노 compensation schemes.
For much of history, however, shareholder value has been the driving force behind how 꽁 머니 카지노 compensation plans are created. But is this the most logical determinant? Is there evidence to support the link between 꽁 머니 카지노 compensation and company performance? And should other factors play a role?
Why is 꽁 머니 카지노 compensation such a thorny -- and critical -- issue? Because it's a key factor in any discussion of corporate governance. The goal of any governing structure is to minimize "divergence of interests between firm owners and management." 꽁 머니 카지노 pay is clearly a way to control managers' behavior and ensure that it aligns with the goals of the company.
The field of 꽁 머니 카지노 compensation has long been dominated by "agency theory," which predicts a "positive relationship between 꽁 머니 카지노 compensation and firm economic performance." According to this view, managers receive pay-for-performance awards in order to give them incentive to pursue the shareholders' values; pay is established based on "arm's length contracting between shareholders and management."
Though this line of thought is pervasive among researchers (it's often considered the "neoclassical" approach), the surprising truth is that little evidence exists to support such a relationship between 꽁 머니 카지노 pay and firm performance. In fact, some researchers attribute recent corporate scandals to the overemphasis on maximizing shareholder value, without regard for the effects on other stakeholders.
In lieu of agency theory, other internal and external influences may actually have greater effects on 꽁 머니 카지노 pay. These influences work on three levels: individual, organizational and institutional. At all three levels, the 꽁 머니 카지노 compensation planning process takes the social environment into consideration, and all three levels treat managerial discretion as a vital element.
The individual level, in particular, takes managerial discretion into strong account. Discretion refers to "the latitude of actions of 꽁 머니 카지노s and the individual's set of responses available which influence the context." Managerial discretion turns agency theory's "contracting" idea on its head: contracts are not perfect or completely thorough, and 꽁 머니 카지노s' personal beliefs and perceptions give them the power to instigate negotiations around their compensation (though they are somewhat limited by "market forces and other corporate governance mechanisms"). Managerial discretion can also lead to harmful outcomes, as managers may choose to act in their own self-interest rather than the firm's.
The organizational level addresses corporate purpose and a company's board of directors. According to this approach, shareholder value is not the same as long-term value for a company. To achieve long-term value, all stakeholders' interests, not just the shareholders', must be considered. Discretion is used not only by managers but also by the firm and the board when it comes to establishing pay schemes. This explains why "comparable firms may pay comparable 꽁 머니 카지노s differently."
At the institutional level, 꽁 머니 카지노 compensation is considered "socially embedded," and decision making is affected by a variety of factors including culture, history, norms and values. This view holds that corporate governance is "a problem of social action," and that 꽁 머니 카지노 compensation depends on societal needs and opinions. 꽁 머니 카지노 pay differs widely among different countries, and even within a single country. There is still much to learn about the exact effect national conditions have on compensation plans.
With all this in mind, a new question arises: What's missing in 꽁 머니 카지노 compensation plans? The answer is clear: social responsibility. In the wake of corporate scandals like Enron, in which highly paid but unethical 꽁 머니 카지노s wreaked havoc on their workers' lives, business ethics and corporate social responsibility (CSR) have entered the discussion around 꽁 머니 카지노 compensation.
The neoclassical economic view of 꽁 머니 카지노 compensation, as just discussed, focuses on maximizing shareholder value, and "any financing or investment decision that is not expected to improve the value of the shareholder's stake in the business is not acceptable." 꽁 머니 카지노s are judged against "accounting and market-based measures of performance." As stated before, such a single-minded focus on financial performance can have negative consequences.
But what's the alternative? A stakeholder management approach, which asserts that a company is "a network of relationships with multiple constituencies," holds a possible solution. When diverse stakeholders' goals are all part of 꽁 머니 카지노 strategy, a firm cannot be so single-minded. Indeed, a firm's CSR becomes "a source of competitive advantage"; it "enhances its 꽁 머니 카지노 reputation, improves trusting and cooperative relationships, provides access to superior resources, lowers liability exposure and enhances social legitimacy" -- all of which strengthen the bottom line.
The exact connection between CSR and financial performance, however, is yet to be established; much research remains to be done. Some studies, in fact, have uncovered potential problems with CSR as it relates to 꽁 머니 카지노 compensation.
꽁 머니 카지노 compensation is, at this point, an imperfect science. But one thing is clear: "relying exclusively on financial performance measures as the single criterion to which to link 꽁 머니 카지노 pay might well be the cause of undesired corporate behaviors."
Furthermore, "pay schemes that only reward financial performance may deter managers from engaging in 꽁 머니 카지노 social initiatives, since the link between social actions and financial performance is not straightforward and could actually hinder more immediate results."
The effort to link 꽁 머니 카지노 compensation to social responsibility as well as financial performance is worthwhile, and promises to benefit 꽁 머니 카지노s, shareholders, additional stakeholders -- and the companies to which they owe their livelihoods.
Pascual Berrone, JordanOtten and Luis R. Gomez-Mejia are the authors of chapters 9 and 16 of "Global Compensation: Foundations and Perspectives" (Routledge, 2008) where they discuss the global nature of 꽁 머니 카지노 compensation and suggest potential revisions to widely accepted structures.
15,000개의 아티클을 제대로 즐기는 방법
가입하면, 한 달 무료!
걱정마세요. 언제든 해지 가능합니다.
인기기사
회원 가입만 해도, 꽁 머니 카지노 월정액 서비스 첫 달 무료!
15,000여 건의 꽁 머니 카지노 콘텐츠를무제한으로 이용하세요.