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Abstract: * Using the resource-based view, this paper links the degree of interdependence that exists between subsidiaries of multinational corporations (MNCs) to the use of various International Human Resource Management [...]

Thinking of tweaking your sales team's compensation plan? Join the dub. A majority of sales executives (64 percent, to be exact) rate their current pay plans as only "somewhat successful" […]

The sales compensation program should include a total, not only incentive, payment system. It should also involve career development plans.

The difficulties Pickfords, a home and commercial moving company in the United Kingdom, faced before it implemented a new pay structure and working time program and the new terms and conditions package are analyzed. As typical among many road transport company, Pickfords had a low basic pay and high overtime earnings, which created problems with recruitment and retention and hampered the company's competitiveness. The company proposed a simplified pay structure, a Chrysalis pay matrix, as well as geographic pay bands and flexible working contracts. The problems and pay structure are analyzed.

This paper examines the link between the sensitivity of compensation to accounting earnings over CEO tenure and the discretionary accrual and expenditure decisions made by CEOs during their career. It finds that the sensitivity of compensation to earnings during the first-half of the CEO's tenure is significantly greater than during the second-half. The opposite is the case for the association of compensation with stock returns. However, not all managers make income-increasing earnings management decisions during the initial stages of their tenure to exploit the higher weight on first period earnings. Instead, it is observed that for a given amount of earnings growth, those CEOs who make income-increasing decisions during the first-half of their tenure, on average, get a significantly lower increase in cash compensation than those who make income-decreasing or no discretionary accrual decisions. The evidence is supportive of an efficient contracting environment where shareholders use early career earnings management decisions of CEOs as screening devices.

The Royal Bank of Scotland introduced its 'total reward' benefits package in 1998 in line with its efforts to create an 'employer brand' that could help it attract and retain quality workers. The scheme, called RBSelect, offers the bank's 18,000 employees in 700 locations a broad array of benefits and considerable freedom in determining the weighting of the elements of their remuneration package. The total package consists of six elements: private health care cover, insurance, savings, basic salary, holiday pay and 'lifestyle features.' RBSelect is the biggest scheme of its kind in the UK, and is different from other flexible benefits plans in that it entails the use of an employee's basic salary, benefits and regional allowances as a fund that can be used on any benefit.

AmeriSteel's experience shows that gainsharing can generate 8% average annual productivity increases and substantial rewards for high-performing employees. AmeriSteel has dramatically reversed a disastrous trend of losses and declining market [...]

Deciding the level of your compensation requires a delicate dance--and your partner may be the IRS. How much should you pay yourself? It sounds so simple. But if you own [...]

Compensation strategy has been important to Big Blue's transformation to an attractive employer for hip IT Generation Xers and People in Black. IBM's odyssey from industry domination to near failure [...]

Pay-for-knowledge can increase productivity while providing workers with a more interesting and challenging work environment. Pay-for-knowledge compensates employees for adding value to the enterprise. Under a pay-for-knowledge system, workers receive [...]

Three companies strive to balance macroeconomic forces with performance measures and rewards that emphasize the more controllable microeconomic aspects of the business and its fundamental value. As the bull market [...]

In designing and evaluating a pay plan, attitudinal data can provide a solid foundation. It is becoming increasingly common for senior managers to ask compensation professionals to provide economic data [...]

Administrators at Winchester Hospital in Winchester, MA, developed an incentive compensation scheme to foster innovation and improve profitability. The voluntary compensation plan offers both staff and middle managers a share of the hospital's profits if they design programs that would result in cost savings or an increase in revenue. The incentive compensation program has become successful due to identifiable factors such as the strong administrative collaboration between human resources and finance and the commitment of managers and employees., The right incentive compensation program can become an organization's new standard of excellence. To encourage innovation and improve departmental and organizational bottom lines, Winchester Hospital, Winchester, Massachusetts, developed and implemented [...]

A distinctive risk and reward system is one key element supporting Saturn Corp.'s success - here's why. When the first Saturn automobile rolled off the Spring Hill, Tennessee, assembly line [...]

For solid advice on how gainsharing works, listen to what managers who have implemented plans have to say. Why are some gainsharing plans more successful than others? Some answers to [...]

The development of a good compensation scheme is one of the main challenges facing manufacturing companies that are abandoning piecework methods in favor of collective work groups. One such organization is US Shoe Corp., which found itself facing this challenge when it made the transition to team-based manufacturing operations. As a solution, the company formed a committee consisting of eight managers to create a new compensation package. This committee devised two compensation plans that were eventually found to be limited. Despite the failure of these early initiatives, a moderate level of success was achieved and lessons were learned. These insights were then used in the design of a third plan, which was found to be the best for the company. Other companies visit US Shoe's plant in Flemingsburg, KY, to learn from its experiences., Designing an effective compensation plan is a challenge for manufacturing companies as they make the transition from individualism - or piecework - to collective work teams. Increased competition from factories [...]

How Jaguar Cars changed employees' attitudes about customer service and performance evaluation. Shortly after being acquired by Ford Motor Company in 1990, Jaguar North America embarked on an ambitious journey [...]

Carbon and graphite producer UCAR International Inc. has been outsourcing its benefit administration function since 1991 when its former parent company Union Carbide Corp. initiated a financial reorganization. Its size made outsourcing an ideal strategy for UCAR to achieve its cost and service-level targets. The company, which has been spun off from Union Carbide and has completed an initial public offering of common stock in 1995, was compelled to adopt a formal vendor-management program to resolve a number of problems that have been undermining its outsourcing activities. These included processing errors, high bills for some projects, misrepresentation of deliveries and lack of vendor responsiveness. UCAR is now implementing an action plan to maximize the success of its partnerships with service providers.

'This is one firm that's intent on growing not on the backs of its employees, but with their concerted participation - a strategy worth emulating.' - Sam T. Johnson A [...]

Honeywell's Commercial Avionics Division charged a group of employees to align compensation with business goals. The team's decision to link workers' pay to division profitability got better buy-in because it [...]

IBM replaced its outdated compensation plan with a worldwide framework. is it paying off? DID IBM really need a new sales compensation plan? As much as it needed a vision. […]

Health care reform initiatives have mostly focused on adopting decentralization and market orientation. A longitudinal case study of five clinics in a university hospital shows how a traditional overall budgeting system was abandoned in favor of a performance compensation system. Under the new system, the clinics were paid a fixed price per unit produced. The case story demonstrates that ambitions of setting strict market line compensation and contracting forms have not been met. An alternative conceptualization of the firm and competition is described.

When benefits are expressed as cash, employees can't miss their impact on pay. Do these phrases look familiar? The total cost of your company-provided benefits adds XX% or more to [...]

Multinational corporation DuPont began to revamp its health-care program in 1993 when it realized that escalating medical costs could seriously undermine corporate performance. That year, the company spent about $500 million on health benefits for its employees, pensions, survivors and their dependents. Given projected cost increases, this figure would have reached $1 billion by the year 2000. Instead of spending this huge amount of money, DuPont chose to adopt a health-care program that was both attractive to employees and cost-effective for the organization. With input from focus groups and managers, the firm was able to develop a four-pronged health-care strategy. This included prevention and wellness initiatives, managed health care, cost sharing, and involvement in the national discussion of health-care issues., As health-care costs continue to increase, companies struggle with maintaining benefits that are attractive to employees but at a cost that does not have a devastating impact on company profitability. [...]

The escalating cost of delivering employee benefits in the 1990s has forced all employers, both large and small, to reexamine their plan designs. Almost inevitably, benefits are scaled back. But [...]

If your employees take their benefits for granted, perhaps it's time for a make-over. Read how Owens-Corning scrapped its entire program and started over, freeing up much-needed cash in the [...]

Virginia Power Co. decided to do away with its traditional pay scheme in favor of a compensation plan that is aligned with the utility's business strategy. Such reform meant the introduction of enhancements to the company's team-based performance incentive plan known as Success Sharing. Under the old compensation plan, pay levels at Virginia Power were dictated by length of service. In contrast, the new pay structure focuses on employee and team contributions, with pay level determined by business results. Base salaries are positioned a little below market average pay while variable pay opportunity is positioned higher than that provided by other electric utilities. The result is a labor cost that varies with the business performance for each year. Other companies that want to link pay and performance should pursue and test different compensation structures to see what suits them best., Virtually every business enterprise in the United States has had to cope with the cost and performance pressures resulting from an increasingly competitive, global marketplace. The electric utility industry is [...]

Duke Power conducted a project in 1990 to align its rewards system with the investor-owned electric utilities' strategic plan. Before this initiative, compensation and benefit schemes did not have any systematic process for development and revision. Its programs were like a patchwork quilt that is revamped across time based on company changes and environmental forces. To introduce a strategic direction to the company's compensation and rewards programs, the company undertook the Rewards Systems Alignment Project (RSAP). The first phase of the project involved the development of a mission, objectives and guiding principles for rewards; assessment of the existing reward systems; and development of a plan for reforming rewards. The second phase involved the specific projects for the reformation of the programs. Implementation began in Jan. 1992., The electric utility industry is undergoing tremendous change as companies prepare for deregulation. Duke Power, one of the country s top-ten investor-owned electric utilities, began preparation in the mid 1980s. [...]

Greater emphasis on personal responsibility is motivating a growing number of employers to provide investment education programs. A good program takes the audience into account, sets specific goals, uses media to reach its target audience and has provisions for measuring results. The investment education programs of such companies as Xerox, TWA and Nestle are discussed., American workers are getting a massive dose of a subject they may have avoided or tuned out when in high school or college -- economic education. Their motivation? An increasing [...]

How management accountants created an objective financial measure for compensation. Increasingly, management accountants are being asked to develop pay-for-performance programs for their company's management group. The interest in new compensation [...]

Planning for the future today demands that employers seek an approach to paying employees that will reinforce changing definitions of work, careers, and organizations. One of the solutions companies are [...]

Zeneca Ag Products has been undergoing a radical reorganization since 1993. The need for a major reengineering project became apparent when the firm's ability for growth weakened due to the economic downturn and to price-cutting by the competition. In addition, its parent company ICI PLC became a possible takeover target, which compelled the corporate board to spin off the conglomerate's various business units. To survive in this new environment, the North American division of Zeneca Ag Products adopted a new team-based business strategy that focused on long-term growth through better customer service. Management realized that business practices also had to be restructured to support the revised business strategy. In the area of HR management, the structures that had to be redesigned to support the reengineered organization included a new performance appraisal system, training and development, employee selection and compensation systems., Zeneca Ag Products is in the third year of its major reengineering project. Although the organization continues to undergo a dramatic transformation as a result of these efforts, the groundwork [...]

Several companies have reduced their workers' compensation costs by integrating their disability and health care management functions. The coordination of two interventions, however, requires strategic planning, preparedness and prevention, loss control, rehabilitation and expedited return to work as well as evaluation of the disability episode and learning about the direct and hidden disability costs. Four companies which currently have such a program in place include PepsiCo., Southern California Edison Co., L.L. Bean and General Electric.

As this case study shows, it is possible to design a compensation system that's both efficient for the organization and highly flexible for managers. Visa, the international electronic payment system [...]

Recently, many companies have become intrigued by pay plans based on skills and performance; some have gone so far as to adopt such a plan. In this case study, we [...]

JAMES P. GUTHRIE EDWARD P. CUNNINGHAM Assistant Professor Employee and Community Relations Manager School of Business Pet Foods Division University of Kansas The Quaker Oats Company An increasing number of [...]

General Mills adopted its pay-for-skills plan because management felt it would increase the workforce's ability to control its continuous process technology and to respond quickly to quality and production problems. [...]

Compensation for the 1990s: A Look at IBM IBM's executive compensation plan for the 1990s has a new look. It is flexible enough to meet the many needs and challenges [...]

Treasures On Earth: Protecting Executive Compensation In LBOs Strict adherence to the biblical admonition to lay up for oneself only treasures in heaven is seldom an objective of executive compensation [...]

BOC Gases (UK) successfully aligned its reward system with its competitive strategy. The decision to reform its pay scheme came about in 1997, when its fabrication operation was reorganized with an improved financial information system. To align the reward scheme with the competitiveness strategy of the company, management formed two groups to handle the design and transition. The reward and recognition steering group defined a set of reward principles and success factors, and managed the design, execution and appraisal of the pay schemes. Meanwhile, the fabrication reward working group decided that the reward strategy should be simple, clear, flexible, performance-based, transparent, inexpensive and offer valued rewards. The resulting incentive pay plan incorporated the profitability achievements of individuals as well as their team to recognize individual and group efforts. Employees reported satisfaction with the new pay scheme.

1. Companies Profits (Workers' Participation) Act (XII of 1968)---S.3 . Sched.--Workers' Participation Fund Although maximum nine months are stated but the company liability to pay profit to Fund stood allocated [...]

Royal Bank of Scotland's (RBS) total reward strategy includes pay and employee benefits, but also focuses on learning and development for its 93,000 UK staff. RBS's Your Choice programme includes [...]

1. Industrial and Commercial Employment (Standing Orders)Ordinance,1968 Schd. S.Os.12, 1 and S.2(bb)--- Termination of employment Art.185(3) -- Constitution of Pakistan (1973) Permanent employee cannot be summarily dismissed without a written [...]