Executive Compensation

1 Executive Compensation

Research clearly links managerial leadership to positive consequences for both the individual and organizations, including financial performance. Also, substantial evidence demonstrates that sound managerial leadership practice is critical to creating effective organizations. So it makes sense that executives are well paid for their managerial and decision-making skills.

1.1 What do you believe is a reasonable benchmark for determining executive compensation?

1.2 Also, in your opinion what role should the organization, shareholders, and governments pay in dictating executive compensation?

2 Which benefits?

Imagine you have been hired as a consultant by a company to provide recommendations for what voluntary benefits the company should give employees.

2.1 What steps would you take to determine your recommendations and what questions should you pose to the company to help you determine the best options for their employees?

2.2 HR is spending significantly more time than in past years to educate their employees and communicate the value of company benefits to all especially considering most employees do not understand the true cost and value of the benefits that organizations provide. How would you suggest communicating the values of these benefits to employees?

3 Intrinsic motivation: psychological reward or exploitation?

“In recent years increasing attention has been paid to intrinsic motivation and employee engagement. Self-determination theory (SDT) (Ryan and Deci, 2000) identifies that people have inherent psychological needs for a sense of competence, relatedness and autonomy, and where work design captures these conditions, people will strive to perform because they want to rather than simply because they are paid to. In a similar vein, Jeffrey Pfeffer, in his influential 1998 article ‘Six dangerous myths about pay’, highlights the motivational importance of stability, engaging work and fun in a suitable work environment as a counterpoint to the ‘myth’ that the most effective way to motivate people is through individual incentive compensation.” (Lussier, 2021).

3.1 In your opinion, is employee engagement, whereby employees ‘go the extra mile’ for their employer, a positive outcome of an engaged workforce or a means through which employers seek to exploit their employees at no additional cost to themselves? Cite relevant literature on which you based your argument.

4 Job Evaluations

4.1 What is the basic principle behind using job evaluations?

4.2 Explain the advantages and drawbacks for an organization which uses the factor comparison method to conduct job evaluations.

5 Group or individual incentives?

Explain the merits of adopting an individual vs group incentives approach by suggesting whichever approach would work best in each of the following positions:

• A used car salesperson

• An emergency room nurse

• An expatriate production manager (Cypriot) working to set up a new joint venture factory in Sweden

Clearly explain the reasons behind your suggestion in each case.

 

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Strategic Management Project

Assignment Content Review the Strategic Management Project Background and your strategic management research journal entries from Weeks 1–4. Create a 10-slide presentation for Caterpillar Inc. leadership in which you summarize your key findings, propose….

Case Problem Investment Strategy

Case Problem Investment Strategy J. D. Williams, Inc. is an investment advisory firm that manages more than $120 million in funds for its numerous clients. The company uses an asset allocation model that recommends the portion of each client’s portfolio to be invested in a growth stock fund, an income fund and a money market fund. To maintain diversity in each client’s portfolio, the firm places limits on the percentage of each portfolio that may be invested in each of the three funds. General guidelines indicate that the amount invested in the growth fund must be between 20% to 40% of the total portfolio value. Similar percentages for the other two funds stipulate that between 20% to 50% of the total portfolio must be in the income fund and at least 30% of the total portfolio value must be in the money market fund.   In addition, the company attempts to assess the risk tolerance of each client and adjust the portfolio to meet the needs of the individual investor. For example, Williams just contracted with a new client who has $800,000 to invest. Based on an evaluation of the client’s risk tolerance, Williams assigned a maximum risk index of 0.05 for the client. The firm’s risk indicators show the risk of the growth fund at 0.10, the income fund at 0.07 and the money market fund at 0.01. An overall portfolio risk index is computed as a weighted average of the risk rating for the three funds where the weights are the fraction of the client’s portfolio invested in each of the funds. Additionally, William’s is currently forecasting annual yields of 18% for the growth fund, 12.5% for the income fund and 7.5% fir the money market fund. Based on the information provided, how should the new client be advised to allocate $800,000 among the growth, income and money market funds? Develop a linear programming model that will provide the maximum yield for the portfolio. Use your model to develop a managerial report.   Managerial Report: a.Recommend how much of the $800,000 should be invested in each of the three funds. What is the annual yield you anticipate for the investment recommendation change? b.Assume that the client’s risk index could be increased to 0.055. How much would the yield increase and how would the investment recommendation change? c.Refer again to the original situation where the client’s risk index was assessed to be 0.05. How would your investment recommendation change if the annual yield for the growth fund were revised downward to 16% or even to 14%? d.Assume that the client expressed some concern about having too much money in the growth fund. How would the original recommendation change if the amount invested in the growth fund is not allowed to exceed the amount invested in the income fund? e.The asset allocation model you developed may be useful in modifying the portfolios for all the firm’s clients whenever the anticipated yields for the three funds are periodically revised. What is your recommendation as to whether use of this model is possible?  

Case Analysis

You can view the article (the case), “The Man Who Got Honeywell’s Groove Backt”, by linking to the course EReserves  Follow the Case Analysis Outline given in your syllabus. This is….