Annual Bonus Research Articles

CEO Overconfidence and Bonus Target Ratcheting

ABSTRACT This study examines the performance target response to CEO overconfidence. Using unique hand-collected data on the annual bonus targets of Standard & Poor’s (S&P) 1500 firms, we find that boards ratchet targets more aggressively and apply greater ratcheting asymmetry for overconfident CEOs than for non-overconfident CEOs. These findings are robust to a battery of sensitivity tests. We also provide evidence that the increase in target ratcheting for overconfident CEOs is particularly more pronounced in firms with strong monitoring environments. Collectively, our findings suggest that boards actively consider CEOs’ overconfidence when setting performance targets, providing new insight into the importance of CEOs’ personal traits with respect to the incentive effects of performance target revisions. JEL Classification: G34; J33; M52.

Do independent directors inform the share of CSR criteria in executive compensation? Moderating effect of gender diversity

AbstractThis paper extends and enriches the current research on CSR, CEO compensation contracts and characteristics of the board of directors by examining an underexplored question related to the potential impact of independent board members on the share of CSR criteria in executive compensation. It also considers a potential moderating effect of gender diversity in this relationship. Empirical analyses of a sample French firms listed on the SBF120 index between 2014 and 2021 show that independent directors have no impact on the inclusion of CSR criteria in the annual bonus of senior executives. They also reveal that gender diversity can strengthen the role of independent directors in indexing executive compensation to CSR criteria. The findings can be useful for corporate boards and policymakers seeking to boost the adoption of CSR criteria in executive compensation contracts. They provide empirical support for the Zimmermann law (2011) and urge the policymakers to boost the appointment of female directors on boards.

Application of Profile Matching in Determining Employee Annual Bonuses

Application of Profile Matching in Determining Employee Annual Bonuses

A Review on the 3D Cartographic and Spatiotemporal GIS Models for Safety of Accidents in Deep Underground Coal Mines

The aim of this study was the safety risk assessment of accidents that occur because of production dynamics in deep coal mining, one of the highly dangerous business class, with spatiotemporal GIS. In this study, accidents that occur at certain times during production in underground mining workplaces are discussed based on evaluations of spatial and temporal dimensions. Accordingly, various analyses have been handled using criminology science tactics and strategies such as 80–20, kernel density, space–time cube, and hot spot, which have been adapted to GIS tools. Implementations have been realized on 3D underground cartographic models covering accident data from deep coal mine workplaces in the Zonguldak-Kozlu basin in Turkey between 2019 and 2021, at an average elevation of – 400 m. Space–time cube, kernel density, and time series analyses suggest that the Annual Bonus Incentives, which are repeated every year and given before the new year, increase the psychosocial risks for employees. It has been determined that this situation can lead to problems such as poor concentration among miners and loss of focus in some shifts. Additionally, significant relationships were found between the number of accidents and monthly production progress rates as a temporal parameter. The results demonstrate that applying a reactive approach with spatiotemporal GIS to accidents in deep coal mines is becoming increasingly important.

Disturbing the Quiet Life? Competition and CEO Incentives

ABSTRACT Although it is well understood that product market competition acts as a disciplining mechanism that reduces inefficiencies, our understanding of the implications for firms’ incentive design choices is still limited. We use a comprehensive new measure of competition and examine its effect on four major choices: CEO equity portfolio incentives, annual bonus plan incentives, choice of performance measures, and difficulty of financial performance targets. We find that competition reduces firm profits and total CEO compensation, including equity grants, which then also weakens portfolio incentives. Firms respond by adjusting annual bonus plans to restore incentives. Specifically, we find that competition goes together with stronger bonus plan incentives, more challenging annual performance targets, and a greater emphasis on long-term performance measures. Finally, we show that competition increases performance relative to annual bonus targets, which we interpret as evidence that CEOs work harder but get paid less in highly competitive environments. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M52.

Bonus incentives and losses from early debt extinguishment

An increasing number of firms repurchase debt and recognize associated accounting losses (rather than gains). However, few studies to date have examined the effect of reporting incentives on debt repurchase decisions. We examine the relation between managers' bonus incentives and the recognition of gains or losses from early debt extinguishment (EDE). Our findings indicate that managers tend to recognize disproportionately more losses from EDE when earnings before gains or losses from EDE (i.e., as-if earnings) exceed the maximum performance level set in annual bonus contracts. These results are consistent with the notion that managers' income-decreasing reporting incentives affect debt repurchases. Further analyses indicate that bonus-driven debt repurchases are associated with increases in future bonus awards, but do not significantly affect shareholder value. Overall, our results suggest that managers' bonus incentives are an important determinant of debt repurchases and the recognition of losses.

Analisis Motivasi Kerja dalam Meningkatkan Kinerja Karyawan pada Eyelashbdl di Bandar Lampung

The purpose of this study is to analyze job motivation to improve the performance of Eyelashbdl's employees. The types of research used are descriptive and qualitative. The research was conducted at his Eyelashbdl using data sources obtained from interviews with the owner and two of her three informants. He uses a data-gathering technique in four stages: observation, interviewing, documenting, and providing information. As a result, it was found that work motivation plays an important role in supporting employee performance, and if employee performance is satisfactory, it can be said that Eyelashbdl employee performance is good, and the company's image can be improved. Factors that influence employee performance include providing annual bonuses, free lunches, meeting specific visit goals, working holiday bonuses, performance recognition, and the opportunity for free treatment at Eyelashbdl. Paying salaries annually can have a very positive impact on employee performance, reflected in the services they provide, and attracting customers through the convenience offered. However, the more employees you have, the faster your work will be, and the better your results will be. Eyelashbdl's Profit Growth Drives Employee Motivation.

Factors Influencing Compensation of Early Career Neonatologists.

Workforce characteristics and compensation specific to early career neonatologists remain poorly defined. Lack of transparency surrounding compensation limits benchmarking for neonatologists entering the workforce and may negatively influence individual lifetime earnings. Our objective was to provide granular data for this unique subpopulation by defining employment characteristics and factors influential to compensation of early career neonatologists. An anonymous 59-question cross-sectional electronic survey was distributed to eligible members of American Academy of Pediatrics Trainees and Early Career Neonatologists. A focused analysis was conducted on salary and bonus compensation data collected from the survey instrument. Respondents were classified based on primary site of employment: nonuniversity located (e.g., private practice, hospital employed, government/military, and hybrid employment groups) versus university located practice settings (e.g., work is primarily conducted in a neonatal intensive care unit (NICU) setting located within a university organization). Median quantile regression was used to conduct univariate and multivariate analyses using SAS Software version 9.4. We received 348 responses (26.7% response rate). Median salary was $220,000 (interquartile range: $200,000-250,000). Factors associated with salary include academic rank (instructor: $196,000; assistant professor: $220,000 [12% increase; p < 0.001]; associate professor: $260,000 [18% increase]; p = 0.027) and years of experience (p = 0.017), after adjusting for relevant factors. Employment location, practice type, group size, clinical schedule, location of medical school training, and gender identity did not significantly influence salary in multivariate quantile regression. Median annual bonus was $7,000 higher for nonuniversity located positions ($20,000 vs. 13,000; p = 0.021), with assumption of additional administrative roles and practice group seniority as most commonly cited bonus criteria (p = 0.002 and <0.001, respectively). Academic rank and years of experience may influence salary. Bonus earnings are higher for nonuniversity located positions. Employment models are evolving to incorporate academic teaching appointments while practicing in nonuniversity located NICUs. This is the first detailed compensation analysis of early career neonatologists. · Transparent compensation data specific to early career neonatologists is lacking.. · Associated factors influential to compensation of early career neonatologists remain unclear.. · This study identifies years of experience and academic rank as possible factors influencing salary earnings of early career neonatologists.. · Practicing in nonuniversity located positions was associated with greater bonus earning potential..

Are ESG performance-based incentives a panacea or a smokescreen for excess compensation?

PurposeThis paper aims to examine how the use of environmental, social and governance (ESG) incentives intersects with top management power and various corporate governance mechanisms to affect excess annual cash bonus compensation.Design/methodology/approachThe authors use a novel artificial intelligence (AI) technique to obtain data about ESG incentives use by firms in the S&P 500. The authors test the hypotheses with an endogenous treatment-regression and a contrast test.FindingsWhen the top management team has power and uses ESG incentives, there is a 32% reduction in excess annual cash bonuses implying ESG incentives are an effective corporate governance tool. However, nuanced analyses reveal that when powerful management teams with ESG incentives are from environmentally sensitive industries, have a corporate social responsibility (CSR) committee or have long-term view institutional shareholders, they derive excess bonuses.Practical implicationsStakeholders will better understand management’s motivations for the inclusion of ESG incentives in executive compensation contracts and be able to identify situations which require closer scrutiny.Social implicationsGiven the increased popularity of ESG incentives, society, regulators, boards of directors and management teams will be interested in better understanding when these incentives might be effective and when they might be abused.Originality/valueTo the best of the authors’ knowledge, this study is the first to examine the use of ESG incentives in relation to excess pay. The authors contribute to both the CSR and executive compensation literatures. The work also uses a new methodological technique using AI to gather difficult-to-obtain data, opening new avenues for research.

Performance-Focused Human Resource Development In IT Consulting Firms

Performance-focused human resource development in IT consulting firms. The purpose of implementing this program is to find out the management of human resources that occurs in the company, how companies manage human resources so that performance i mprovements can occur in IT consulting companies and what efforts have been made by companies to manage their companies that have an impact on improving performance as well as what assessment methods used by companies to measure employee performance. Problems that arise such as excessive working hours and other problems can be found in this new start-up company. The method used in this activity is online (using the Zoom us application, Google Meet) and face-to-face. The results of the research conducted indicate that employee performance is very good, companies can find solutions to their employee performance problems by providing some training, mentoring to bonuses that can increase motivation so that employee performance can increase and have a good influence on employees. The company uses the graph rating scale method and the alternative ranking method, where the employee who gets the top rank will be given an annual bonus by the company.

A National Survey of Perspectives of Physician Assistants in Academic Plastic and Reconstructive Surgery

Background: Physician assistants (PAs) are an essential part of the healthcare team who improve access and efficiencies in patient care. A better understanding of the impact and current utilization of PAs in plastic and reconstructive surgery is needed. The purpose of this national survey was to evaluate the role and scope of practice of PAs in academic plastic surgery, as well as characterize current trends of PA utilization, compensation, and perceived value from a PA perspective. Methods: A voluntary, anonymous 50-question survey was distributed via SurveyMonkey to practicing PAs at 98 academic plastic surgery programs. The survey included questions about employment characteristics, involvement in clinical research and academic work, structural organization, academic benefits, compensation, and position held. Results: Ninety-one PAs from 35 plastic surgery programs completed the survey and were included (overall program response rate = 36.8%, participants response rate = 30.4%). Practice environments included outpatient clinics, the operating room, and inpatient care. Most commonly, respondents supported multiple surgeons as opposed to one surgeon’s practice. For 57% of respondents, compensation is based on a tiered system that accounts for specialty and experience. The reported mode base salary range corroborates national averages and most reported annual bonuses based on merit. The majority of respondents felt valued in their role. Conclusions: Through this national survey, we provide granularity as to how PAs are utilized and compensated in academic plastic surgery. We offer insight into the overall perceived value from a PA perspective that helps define the role and will ultimately help strengthen collaboration.

Reward system and job satisfaction among employees in the hotel industry in the Sultanate of Oman

Purpose- The study's aim is to determine the intrinsic rewards that Omani hotels use to inspire their employees and to analyse the extrinsic rewards that Omani hotels use to motivate their employees. The study also intends to investigate the association between incentive types and job satisfaction among hotel employees in Oman. Methodology- The study employed a descriptive research design. The study's population was comprised of employees from five different four-star hotels in Oman. A systematic questionnaire was created and distributed to all participants. Rewards (both intrinsic and extrinsic) served as the study's independent variable, and job satisfaction served as the study's dependent variable. The data was gathered on a five-point scale and interpreted using averages, percentages, and correction analyses. Findings- The study noticed that the intrinsic rewards employed by hotels in Oman included recognition and appreciation, an excellent working partnership with the manager, management trust and belief, training and professional development, and work freedom and autonomy. On the other hand, extrinsic rewards are used by hotels in Oman, such as praise and appreciation for a job well done, excellent working environments, attractive salaries, annual bonuses, and insurance for me and my family. Spearman's coefficient of 0.885 indicated a positive and significant relationship between intrinsic rewards and work satisfaction among Oman hotel employees. Similarly, a Spearman's coefficient of 0.899 demonstrated a very strong positive and significant association between extrinsic rewards and work satisfaction among Oman hotel employees. Conclusion- The findings suggest that the level of employee job satisfaction in the organisation is reliant on rewards. Keywords: Extrinsic rewards, intrinsic rewards, hotel employees, job satisfaction. JEL Codes: M12, M52, N35

Public sector jobs and subjective well-being in China

ABSTRACT This paper focuses on demonstrating the nexus between public sector jobs and subjective well-being by applying China Household Finance Survey data and exploring the potential transmission channels behind the connection. An instrumental variable and the propensity score matching methods are utilized to address hidden endogeneity bias. Our findings confirm that Chinese public sector jobs have a constructive effect on SWB. From the perspective of work allowance and marriage-matching, mechanism analysis justifies that working inside the system indirectly affects SWB through receiving higher annual bonuses and marrying people who also work within the system or have a higher education level.

Economic Determinants and Consequences of Performance Target Difficulty

ABSTRACT Using data on earnings targets in annual bonus plans, we construct and validate an empirical measure of beginning-of-year target difficulty and show that it is negatively associated with market uncertainty, retention concerns, and Chief Executive Officer (CEO) entrenchment. We then present several findings about the effect of target difficulty on performance and CEO compensation. First, greater target difficulty in annual bonus plans is associated with significantly lower CEO cash compensation as well as with decreases in other compensation awards. Second, moderately challenging targets (neither too easy nor too difficult to achieve) are associated with abnormal reversals in fourth-quarter performance, particularly reductions in fourth-quarter performance after abnormally favorable third-quarter performance. Third, greater target difficulty is associated with higher same-year abnormal earnings but at the same time with lower next-year earnings and stock returns. Combined, our findings suggest that target difficulty is an important incentive design choice that affects performance and executive compensation. Data Availability: Data used in this study are publicly available.

How Short-Term Orientation Dominates Western Businesses and the Challenges They Face—An Example Using Germany, the UK, and the USA

The current study investigates and establishes the factors that lead to short-term orientation strategies in western organisations. Moreover, this study used questionnaire-based surveys to assess the relationship between these factors and what it would take for the organisation to move to a long-term orientation strategy. At the start of the study, it was evident that the annual bonus system is a key reason for prioritising a short-term orientation strategy. The sample was composed of 300 companies of different sizes from different western countries. Furthermore, the general consensus within these companies was that most managers knew that long-term orientation was necessary; however, either their superiors/shareholders/supervisory board only reward short-term results, or the managers and stakeholders prefer short-term goals for evaluations because it is challenging to transform a long-term strategy into multiple short-term strategies and goals. At the end of the study, a basic framework has been suggested to be used as guidelines for any company moving from short-term to long-term orientation strategies.

Decision Support System to Determine the Best Employees at Yogi Banyumas Repair Shop using Topsis Method

The assessment system to determine the best employees at the Yogi shop has not been systemized. It is still limited to the regular assessment assessing the best employees to get an annual bonus based on the owner and manager's assessment, so it seems less accurate and less targeted towards employees who will be given annual bonuses. This study aims to build a decision support system to determine the best employees using the TOPSIS method to make it easier for owners and managers to determine the best employees. The data processing method in this study is the TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) method. The criteria used in this research are attendance, work attitude, responsibility, discipline, cooperation and creativity. From the results of the tests, it concluded that the blackbox testing process was successful. The results of this study are a decision support system to determine the best employees at the Yogi Banyumas store.

Penerapan Metode SAW Untuk Pemberian Bonus Tahunan Berdasarkan Kinerja Karyawan

Perkebunan Nusantara III (PTPN III) Mambang Muda North Labuhan Batu Regency is one of 14 Plantation State-Owned Enterprises (BUMN) engaged in plantation business, processing and marketing of plantation products. The Company's business activities include cultivating and processing oil palm and rubber plants. In the world, Sumatra is known as a producer of high-quality rubber, more than 38,000 hectares of PTPN III Mambang Muda rubber land in Labuhan Batu Utara Regency are endeavored to produce the best quality latex in the world. Behind the production of quality sap, reliable employees are needed in processing the sap, therefore PTPN III Mambang Muda must provide an annual bonus in addition to the basic salary to boost the performance and work productivity of its employees. However, the problem that occurred at PTPN III Mambang Muda was that it could not estimate the amount of the bonus correctly in giving the annual employee bonus because there were no criteria in staff who had priority to get a salary bonus including work performance, work discipline, and years of service. using conventional systems, the closeness of managers to employees often results in decisions that are different from what they should be, this causes the results of the decisions to be incorrect. The method used in decision support for granting annual bonuses to employees is the Simple Additive Weighting method because this method can select staff from various other alternatives who are entitled to receive bonuses from the company which results from this study are able to rank employees of PTPN III Mambang Muda Labuhan Batu Utara Regency. Employees who get bonuses are employees with the top 3 scores, namely: Rudiadi with a score of 0.788235, Zulkarnaen with a score of 0.776471, and Arif Sitorus with a score of 0.752941

SPK Kriteria Pemberian Bunus Tahunan Karyawan dengan Metode Simple Additive Weigthing

Annual Bonus is an award for employees who work at PT. Trust. Bonuses are given once a year. The problem that often occurs in giving bonuses is the difficulty of calculating the bonus to each employee who works at PT. The trust. The purpose of this study is to assist companies in providing bonuses to employees by looking at the criteria set by the company. The Simple Additive Weighting (SAW) method is the sum of all the weights of the performance of each object that is different but has the same opportunity with the criteria owned. The process of solving the algorithm using the Simple Additive Weighting (SAW) method uses a normalization process in the decision matrix (X) by comparing the alternative twig values owned. Variables that are used as a reference in giving bonuses are .1 Absence, 2. Working Period, 3. Attitude, Work Quality and Work Results. This method uses the SPK SAW method with a work process. The final result of the search process obtained the value of C1 = 1, C2 = 0.74, C3 = 1, C4 = 0.9 and C5 = 0.94 the names of employees in order 1 and 3 are prioritized to get the biggest annual bonus compared to other employees

Sistem Penentuan Bonus Karyawan menggunakan Metode Simple Additive Weighting

The Simple Additive Weighting (SAW) method is one of the methods in determining decisions based on predetermined criteria, such as employee annual bonuses. However, there are no criteria and systems used to determine who employees are eligible for the yearly bonus based on their purpose The purpose of this study is to create a system of supporting employee annual bonus decisions by applying the SAW method. The waterfall is a model used to build this system through analysis, design, implementation, and testing. Data collection used observations and interviews, as well as data used by 20 people. The data analysis technique uses the SAW method by looking at alternatives and rankings of the results obtained. Testing this system uses a black box by looking at the processes and functions of several components in this system. These findings result in a system that can provide a decision to determine annual bonuses for employees using the SAW method addition, has been successfully implemented with this method. In addition, this system also has all its components already functioning, both from the login process to being able to produce feasible decisions and not determining the bonus.

The social consequences of Machine Allocation Behavior: Fairness, interpersonal perceptions and performance

Machines increasingly decide over the allocation of resources or tasks among people resulting in what we call Machine Allocation Behavior. People respond strongly to how other people or machines allocate resources. However, the implications for human relationships of algorithmic allocations of, for example, tasks among crowd workers, annual bonuses among employees, or a robot’s gaze among members of a group entering a store remains unclear. We leverage a novel research paradigm to study the impact of machine allocation behavior on fairness perceptions, interpersonal perceptions, and individual performance. In a 2 × 3 between-subject design that manipulates how the allocation agent is presented (human vs. artificial intelligent [AI] system) and the allocation type (receiving less vs. equal vs. more resources), we find that group members who receive more resources perceive their counterpart as less dominant when the allocation originates from an AI as opposed to a human. Our findings have implications on our understanding of the impact of machine allocation behavior on interpersonal dynamics and on the way in which we understand human responses towards this type of machine behavior.