With pension plans increasingly under the microscope in many companies, a recent 8-year study in the US examined the role of board composition in determining pension policies. The results indicate that outside directors play a valuable role in maintaining the interests of pension beneficiaries, with regards to both pension plan funding levels and asset allocations, and particularly in times of financial distress they help to keep the board on course to meeting its obligations toward pension plan beneficiaries.
Key Topics: Board of directors; Board composition; Outside directors; Pension policies; Defined benefit pension plans
The effect of variable compensation on job performance has been well established, although the examination of incentive plans relating to performance against budget targets has received limited attention. A study of the Australian manufacturing sector examined the role of organizational commitment and trust-in-supervisor in the relationship between budget-based incentive compensation schemes and employee job performance and found that such schemes can lead to greater trust-in-supervisor, which in turn leads to greater subordinate job performance and organizational commitment.
Key Topics: Variable compensation plans; Trust-in-supervisor; Organizational commitment; Job performance
The role of management bonuses in employee behavior is a little researched area but one that is potentially of great significance for companies. A study in Canada looked at the impact of management pay for performance bonus eligibility on the turnover levels of non-management employees. The results indicate that management bonus eligibility is indeed related to greater levels of voluntary non-management employee turnover, but is not related to greater involuntary turnover.
Key Topics: Pay for performance; Bonus eligibility; Employee turnover
Against the backdrop of increasing income inequality in many developed countries in recent decades, a recent study analyzed Danish private sector data from 1992 to 2007 to determine the level and trends of income inequality during that period. The results confirmed that income inequality increased in Denmark during this time. The researchers also found that the relative proportion of highly educated individuals increased, as did income growth rates across various employee subgroups, with managers seeing a particularly significant real income progression. Education and Management income premiums were found.
Key Topics: Income inequality; Upskilling; Education; Management pay
How people are perceived by others has important implications in all areas of life, not least in the workplace. A recent novel study examined the effects on managerial pay of perceived physical attractiveness, trustworthiness and dominance as perceived through facial cues. The strength of all three of these facial cue types were found to be positively associated with greater managerial pay, but attractiveness was found to be a more important factor in mid-level than senior managerial pay, while perceived trustworthiness and dominance were more important in determining senior management pay.
Key Topics: Management; Face perception; Attractiveness; Dominance; Trustworthiness; Compensation |
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