Performance Based Remuneration
Performance Based Remuneration INTRODUCTION Performance based remuneration is stated in the equity theory on the part of individual equity. It is variably tied into an employees work unit. Before this performance based pay was only offered to a senior executives only but recently it has been extended to many other employees because organization has realizes how variable compensation program can give impact to the individual employee’s behavior and performance. Performance based remuneration consist two term which are incentives and merit. SUMMARY As related to my topic, the journal that I have chosen is about the uses of performance based remuneration in high versus low growth firm. The article is discussing about the level and structure …show more content…
The first categories is CEO remunerations packages is not containing any terms of incentives have 16% from high growth company and also the same for low growth. For the second categories which are the incentive payment given to the CEO maybe from time to time have 14% form high growth and 6% from low growth. For the categories of cash salary combined with cash bonus plus an equity based component is included in the CEO remuneration have 50% for high growth and 48% for low growth. Next is the remunerations for the CEO have cash salary plus bonus with no equity based component have 8% from high growth and low growth. Categories that the remuneration includes cash salary plus equity based with no bonus have 10% for both groups. For the last categories that incurred the highest percent for both groups which is 100% is the hybrid remuneration that mixed with the short term incentives paid in equity and cashes also a long term incentive paid in cash. As for the overall result the sample firm remuneration structures shows that the performance based compensation is positively linked with the firm …show more content…
In the main, the result of the research was regularly with prior expectations that high growth firms take more serious use of performance based pay. Besides that, the result point out that high growth firms rely more on non financial performance standard and on market based than in the low growth
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