Barcelona and Real Madrid are dominant forces in world soccer as well as domestically in Spain, but what role does reward management play in their success and what can organizations learn from their successful team reward strategies? With organizations increasingly utilizing team work in order to increase company performance and competitive advantage there are some key lessons that they can learn from two of the most successful teams in world sport today.
Key Topics: Team performance; Pay-for-performance; Pay dispersion, Merit pay; Bonuses
Effectively managing employee turnover is a primary concern for many companies, as they try to retain their most talented employees. Effective turnover management can be particularly important when it comes to the CEO’s top team, as their departure can often have a significant impact on overall company performance. A study of Standard & Poor’s 500 companies from 1994 to 2008 examined the impact of pay dispersion, pay disparity, and pay level relative to the market on executive turnover, and found that not only did these factors significantly impact turnover but that they interacted in interesting ways to increase or decrease turnover levels.
Key Topics: Executive compensation; Benchmarking; Pay disparity; Pay dispersion; Turnover
As companies continue to strive to fill jobs with the best talent, their search often ends with hiring candidates sourced from outside of the company. A 5-year study of executives at US hi-tech manufacturing companies examined the role that the external labour market plays in gender pay differences. While female executives were found to have higher compensation than comparable men, the results indicate that women hired externally receive less than those hired internally, and as such may be disadvantaged by the external labour market.
Key Topics: Gender pay gap; External labour market; Executive compensation; Promotions; External recruitment
In many countries, the pay gap between senior management and employees is on the rise, as is the research interest in this topic. A study of Chinese publicly traded companies examined whether a pay gap serves to motivate employees to increase their performance or whether effort is reduced due to aversion to inequity. The results of the study indicate that there is an inverted-U relationship between a company’s pay gap and their productivity, meaning that depending on a company’s proximity to the optimal pay gap level a pay gap can have positive or negative company performance implications.
Key Topics: Executive compensation; Pay gap; Employee performance; China
Company boards are often faced with the task of determining CEO compensation based on incomplete information regarding their performance and competency. A study of US S&P 500 companies over a 7-year period examined the relationship between CEOs’ use of language that signals their competency and CEO compensation. The findings of this study indicated that the use of such language by CEOs was related to higher levels for CEO compensation, and this relationship was stronger when CEOs were under threat from shareholder activism.
Key Topics: CEO compensation; CEO performance; Symbolic language; Shareholder letters, Shareholder value principle
CEO compensation packages are becoming increasingly standardized, for various reasons, including the growing influence of external bodies on company boards of directors. A study of US CEOs over a 7-year period, which examined the relationship between CEO compensation effectiveness and their tenure, found that the motivation inducing effects of different compensation components differed depending on how long CEOs had been in their role. The results suggest that standardization of CEO compensation is not an optimal compensation strategy for companies to follow.
Key Topics: CEO tenure; CEO compensation; Shareholder returns; Performance-based compensation
Popular Reward Chronicle Searches
Pay for performance
Join The Reward Chronicle Team
Are you passionate about reward? We’d love to hear from you. Click here for more details on how to contact us.