Compensation & Benefits - Annotated Bibliography Example

Compensation and Benefits: Annotated Bibliography Roll No: Teacher: 10th January 2009 Compensation and Benefits: Annotated Bibliography Abowd, J. (1990). “Does Performance-Based Managerial Compensation Affect Corporate Performance?”. Industrial and Labor Relations Review 43 (3), 52-73. In the article, “Does Performance-Based Managerial Compensation Affect Corporate Performance?” (1990), Abowd describes about compensation and its affect on corporate performance. The author analyzes the impact of compensation that is given on the basis of managerial performance. The management of an organization has the central role in order to control the activities of the organization. When the managers are given performance-based managerial compensation, they are motivated to perform better and continue with their good work. Corporate performance as a whole is crucial in an organization’s success and depends on managerial performance. When managers get performance-based managerial compensation, the whole corporate performance is affected because of job satisfaction of the managers. Baker, G., Jensen, M. and Murphy, K. J. (1988). “Compensation and Incentives: Practice vs. Theory”. Journal of Finance 43 (3), 593-616. Baker, Jensen and Murphy in their article, “Compensation and Incentives: Practice vs. Theory” (1988) explain about compensation and incentives in terms of their theoretical and practical implementation. The theories of compensation and incentives are discussed and analyzed in detail. The practical implementation of the theories of incentives and compensation are also analyzed. The study informs that theory and practice are somehow different although there are many similarities but differences also exist. One theory is not employed alone but in amalgamation with other theories in practice for making the employees satisfied with their jobs and pays. Practically, the compensation and incentives are considered unsuitable by most of the employees. Ducharme, Mary Jo, Singh, Parbudyal and Podolsky, Mark. (2005). Exploring the Links between Performance Appraisals and Pay Satisfaction. Compensation & Benefits Review 37 (5), 46-52. In the article, “Exploring the Links between Performance Appraisals and Pay Satisfaction” (2005), the authors Ducharme, Singh and Podolsky explain that pay plays a crucial role in affecting the employees as well the organization in terms of their behavior. All the concepts associated to the organizational setup such as contentment with the job, incomes of employees, malingering of employees and the performance of employees are associated with the satisfaction with the pay that employees get. Employees are satisfied with the increase in pay but it is not possible for all the organizations to provide satisfactory pay to their employees. Ducharme, Singh and Podolsky evaluate the consequences of performance assessment in terms of satisfaction with the pay. The authors have conducted a detailed analysis of employees working with organizations getting pays by performance assessments and without them. The resulting data indicates that job satisfaction is there with pay satisfaction and only those employees are satisfied with their pays whose performances are evaluated. Gibbons, R. and Waldman, M. (1998). “Careers in Organizations: Theory and Evidence”. O. Ashenfelter and D. Card (eds.). Handbook of Labor Economics 3, North-Holland. The work, “Careers in Organizations: Theory and Evidence” by Gibbons and Waldman (1998) describe in detail about the careers that are found in different types of organizations. There are many careers in an organization such as managers, accountants, relationship officers, secretaries, clerks, supervisors, laborers and many more. All types of different careers have different types of compensations attached to them and different objectives and ambitions. The evidence collected by the help of a survey indicates that careers in organizations differ in terms of the category of the organization and the pays associated to a career. For a higher career, the pay scale is also kept higher. In some organizations, the workers are motivated to move towards higher careers and to get more compensation on the basis of their performed tasks and their experience with the organization. Hansen, Fredrick, Smith, Michele and Hansen, Ries B. (2002). Rewards and Recognition in Employee Motivation. Compensation & Benefits Review 34 (5), 64-72. In the article, “Rewards and Recognition in Employee Motivation” (2002), Hansen, Smith and Hansen describe that reward and recognition are considered as interrelated to each other and are employed synonymously. The two approaches are quite different from one another and should not be regarded as synonymous. Both the terms play a significant part in the motivation and encouragement of employees. They can be considered as dual approaches towards employee motivation. According to the authors of this article, rewards and recognition, both are neglected in organizational setup and for motivating the employees by considering them as the same approaches. Employees are provided with motivation but by considering these two approaches as similar. However, these two types are different and equally effective. The motivational programs that are arranged for the employees’ motivation and encouragement appear unconvincing because employees are provided with one of the two motivating aspects that is reward or recognition while employees are in need of both. Recognition and reward are different and should be dealt differently. Lazear, Edward P. (2000). Performance pay and productivity. American Economic Review 5 (90), 1346–1361. “Performance pay and productivity” by Lazear (2000). Lazear (2000) informs in his article that performance-related pay has a positive impact on employees. He has analyzed the performance-related pay schemes and the productivity of labor by the help of an experiential data collection. His collected data indicates that the impacts of performance-related pay are motivation of employees, better performance of tasks, good earning, autonomy of workers, productivity and development of a positive relationship between the employees and employers. The collected data indicates that performance-related pay is very advantageous for improving the performance of employees, while he has negated the factors that are also disadvantageous and are associated to the performance-related pay. Kauhanen, Anti and Piekkola, Hannu. (2006). What makes performance related pay work? Finnish evidence. Journal of Management Governance 10, 149–177. In the article, What makes performance related pay work?” Kauhanen and Piekkola (2006) made use of a Finnish survey form in order to gain the knowledge about the impacts of performance-related pay. According to their survey, the performance-related pay should be motivational for the employees so that they can come up with good results by considering the payment mode as effective and fruitful. Their survey concludes that the employees should be confident enough in order to check their effectiveness with the organization with which they are working. The employees should gain the knowledge that whatever they are doing for their organization or company is giving them a positive feedback. If the employees are doing more hard work, they should be paid accordingly and they have a negative performance, they must face negative consequences in form of low pay. Prentice, G., Burgess, S. and Propper, C. (2007). Performance pay in the public sector: a review of the issues and evidence. London: Office of Manpower Economics. “Performance pay in the public sector: a review of the issues and evidence” by Prentice, Burgess and Propper (2007) is a review that analyzes the role of an individual in public sector. According to the writers, to analyze the role of an individual in public sector is quite a difficult task, as in public sector employees work with a different format. According to Prentice, Burgess and Propper (2007), performance-related pay is not successful in public sector because of smaller incentives and inappropriate evaluation. Moreover, the criterion of assessment is unknown to employees and is also harder as compared to other workplace environments. In public sector, the amount for performance-related pay is fixed to a certain amount due to which, the workers showing extraordinary performance in work receive less incentives. Pekkarinen, Tuomas and Riddell, C. (2006). Performance pay and earnings: Evidence from personnel records. IZA Discussion Paper Series, (2253). “Pay and earnings: Evidence from personnel records” by Pekkarinen and Riddell (2007) involves the examining of performance based pays as contrasted to fixed payment methods. According to Pekkarinen and Riddell (2007), performance-related pays are more fruitful as the workers that receive performance based pays earn more as compared to the workers that earn fixed pays. Because of performance-based pay, the workers are not more effective, they receive more for the same task, which is performed on a fixed pay by other workers. The writers find a negative link between motivation and job difficulty. According to the writers, payment cannot be categorized as the foremost technique of motivation and motivation is also there because of encouragement and respect. Risher, Howard. (2003). Refocusing Performance Management for High Performance. Compensation & Benefits Review 35 (5), 20-30. In the article, “Refocusing Performance Management for High Performance” (2003), the author, Risher describes that performance management has taken the place of performance appraisal in most of the organizations nowadays. However, Risher also elaborates that the model that was employed for the assessment of performance is still the same but with different title. Risher views the innovated attention towards high performance of employees. The author also proposes certain advantageous aspects that can be utilized in terms of performance management. According to Risher, the conventional approach for analyzing the performance of employees is not worthy in the new organizational setup and many transformations are required to analyze the high performance of employees. The roles of management and the employees are required to be reassessed according to the new organizational setup. References Abowd, J. (1990). “Does Performance-Based Managerial Compensation Affect Corporate Performance?”. Industrial and Labor Relations Review 43 (3), 52-73. Baker, G., Jensen, M. and Murphy, K. J. (1988). “Compensation and Incentives: Practice vs. Theory”. Journal of Finance 43 (3), 593-616. Ducharme, Mary Jo, Singh, Parbudyal and Podolsky, Mark. (2005). Exploring the Links between Performance Appraisals and Pay Satisfaction. Compensation & Benefits Review 37 (5), 46-52. Gibbons, R. and Waldman, M. (1998). “Careers in Organizations: Theory and Evidence”. O. Ashenfelter and D. Card (eds.). Handbook of Labor Economics 3, North-Holland. Hansen, Fredrick, Smith, Michele and Hansen, Ries B. (2002). Rewards and Recognition in Employee Motivation. Compensation & Benefits Review 34 (5), 64-72. Risher, Howard. (2003). Refocusing Performance Management for High Performance. Compensation & Benefits Review 35 (5), 20-30. Lazear, Edward P. (2000). Performance pay and productivity. American Economic Review 5 (90), 1346–1361. Kauhanen, Anti and Piekkola, Hannu. (2006). What makes performance related pay work? Finnish evidence. Journal of Management Governance 10, 149–177. Pekkarinen, Tuomas and Riddell, C. (2006). Performance pay and earnings: Evidence from personnel records. IZA Discussion Paper Series, (2253). Prentice, G., Burgess, S. and Propper, C. (2007). Performance pay in the public sector: a review of the issues and evidence. London: Office of Manpower Economics. Read More