Management of Funds - Assignment Example

Introduction

It is important to highlight that this paper delves into the discussion of the management of funds and to be in particular the way that funds are allocated to the various persons who were employees in any given institution in the name of compensating them. In this paper, there is a theory that will be highly looked into and that is the equity theory. In this theory, it is important to highlight that the theory is so vivid in its explicit stating. It tends to outline that for the better and the required satisfaction in the resources distribution, the allocation should be as anticipated, otherwise, the perception will be considered to be fair or unfair depending on how the allocation and distribution is done. The theory again suggests that what a person or an individual considers to be fair is what motivates the person or the individual (Robert, 2012).

It is important to highlight that the theory relates quite clearly to executive compensation. This is so as in most of the institutions that are in the society today, the executive committee is considered to be of high priority in institution. They are therefore paid large sums of money that are not worth what they should be given. This is not fair as they only develop policies while the employees are the ones who execute the actual tasks in the institution (Robert, 2012).

In the use of another as a referent, it is therefore quite axiomatic that the women should use the men as their preferred referent. This is so because men are considered to be quite productive in terms of the delivery and execution of their duties. Actually, this is some kind of male chauvinism clearly well spelled out here. The relevant input that the top executive should put into consideration is that they should focus on the payment issues (Robert, 2012).

Procedural justice is taken to be the fairness of an action that is used in the ascertainment of the discerned justice. Under this, it is important to consider two fundamental concepts; process control as well as explanations. The implication of this is that the top management has had it quite hectic as they have to strategize and for every move they make, they have to give all the information and explanations for the outcome that will be realized due to their action. According to the chapter, it can be clearly noted that these pay-making decisions do not follow procedural justice; this, therefore, makes the whole process to kind of seem unfair (Robert, 2012).

It is important to highlight that the government is the most authoritative body in every state; it is therefore so vivid that the government can use its legitimate powers in regulating of executive compensation. This can be through the passing of various rules that protect the rights of the employees. By this, the amount that will be used in compensating the executive will be reduced to some value that is almost favorable and bearable by the workers so that they do not see the act as unfair (Robert, 2012).

In firms that perform very well, it is important to note that the top executive are compensated a lucrative amount based on the good jobs that they did. In this case, it is fair (Robert, 2012).