Remuneration Policies Research Articles

How to evaluate the quality of remuneration policy? Evidence from the Polish banking sector

AbstractIn our paper we use an institutional perspective to define the concept of the quality of remuneration policy. Traditional perspective focuses on pay-per-performance relationship between top executives' remuneration and companies' performance. This study is based on the assumption that the acquisition of normatively defined compensation practices and structures is more important for the successful organization than the practices which enhance efficiency defined on the basis of input (compensation) – output (company's performance) relationship. We examine the relationship between the quality of executive remuneration policy and corporate governance standards in banks with a controlling blockholder. Based on the sample of a hand-collected data on corporate governance characteristics, executive remuneration, and financial results of all public banks in Poland from 2005 to 2015, we find that the effective implementation of sound corporate governance practices should be rooted in the form of obligatory normative acts. Consistent with other studies we find a positive and statistically significant relationship between the corporate governance measures and the quality of remuneration policy. In particular, our study shows the significant role of two institutional factors positively determining the efficiency of incentive contracts: remuneration committees and institutional ownership. We also find that the banks controlled by foreign corporations, especially the US–UK–Ireland financial institutions, have a significantly more effective compensation policy than the banks controlled by domestic investors.

Pay regulation – is more better?

From October 2013, UK law and regulations (the Reform) require periodic binding shareholders’ approval of executive directors’ remuneration policy, as well as enhanced disclosure in remuneration reports. These requirements supplement an ongoing requirement for an annual non-binding vote on compensation outcomes that are detailed in the remuneration report. Using a large sample of listed companies from 2010–2017 we investigate whether the Reform has affected pay levels, pay-performance sensitivity, the pay gap between the CEO and other employees, the amount of cash returned to shareholders, and dissent voting on the remuneration report. We find little evidence that the Reform has affected these variables in our sample firms. Using market-based tests we find that market participants anticipated an improvement in corporate governance for some key dates before the Reform came into force. Taken together, the paper’s evidence suggests the Reform has not met its stated objectives.

Analyzing the efficiency of rewards through the principal component method

Subject. As economic processes get digitalized, management needs to address issues with new approaches to raising the efficiency of financial resources allocated for remuneration. Thus, the correlation of rewards and ultimate results of entities become a priority. Therefore, factors influencing the motivation and incentives of the staff and its performance underlie the reward system and the effectiveness of the entity. It is important for the management to measure the effect of the factors on the return on financial resources used for remuneration in order to attain goals and operate in the business environment effectively. Objectives. The study is to model the efficiency of rewards with reference to factors influencing the ratio of output to rewards, expertise and qualification of the staff. We use a linear model of multivariate regression on the basis of the Principal Component Analysis (PCA). Methods. The study relies upon the ordinary least squares methods and PCA, and general methods of research, such as an analysis, synthesis, induction, and deduction. Results. Conducting the managerial analysis of reward efficiency with reference of some determinants and their correlation (the output to reward ratio, staff's expertise and incentives), we evaluate internal corporate factors while handling new issues and outline future actions to set up the comprehensive reward system. The information helps improve the corporate performance and ensure the unbiased remuneration with reference to the employee’s contribution to the accomplishment of business goals. Conclusions and Relevance. The methodological approach we propose helps determine how the factors influence the reward mechanism in order to fulfill the corporate strategy objectives. The findings can be used for operational purposes of entities in order to set up the remuneration policy and tactics harmonizing pursuits of the business and staff.

REMUNERATION JUSTICE IN ISLAMIC HIGHER EDUCATION: A STAKEHOLDER PERSPECTIVE

This study generally intends to analyze perception of remuneration justice from the perspectives of stakeholders in Indonesian Public Islamic Universities (PTKIN) that have acquired BLU status. Specifically, this study aims to measure the level of distributive and procedural justice on the implementation of remuneration at selected PTKIN. The respondents of this study are the beneficiaries and remuneration policy makers from 11 PTKIN that have implemented and paid the remuneration at the time of the study. Additional data are obtained from interviews with nine policy makers from the selected PTKIN. The data are analyzed using descriptive percentages method. The results show that in general the implementation of remuneration at the selected PTKIN in included within “fair” category as perceived by the stakeholders. Partially, respondents perceive procedural justice as tend to be fair, while distributive justice is fair. This shows that in terms of procedures, the selected PTKIN still have to work harder to fulfill a sense of justice, while from the distribution side it has given more sense of justice as perceived by most respondents.

Analysis of the Quality of the Employee–Bank Relationship in Urban and Rural Areas

Banking sector performance is directly related to the economic performance of the country. This research is an effort to establish the parameters of job satisfaction among bank employees and to ascertain whether there were differences in job satisfaction between employees in urban and rural branches. A randomly selected sample was made of bank employees in the Republic of Serbia. To date, the relative job satisfaction of bank employees in urban and rural areas has not been investigated, and for this reason, it is important to analyze the different facets of job satisfaction such as salaries, cooperation with closest associates, promotion, remuneration policy, cooperation and relationship with superiors, and the nature of the job. The bank employees’ satisfaction with their salaries has a major influence on total job satisfaction. Perceptions of teamwork effectiveness and its relationship to overall job satisfaction were analyzed. Team quality has the greatest influence on the bank employees’ job satisfaction. These insights can offer guidance for future action on building the quality of the employee–organization relationship.

THỰC TRẠNG PHÁT TRIỂN ĐỘI NGŨ CÁN BỘ QUẢN LÍ CÁC TRƯỜNG TIỂU HỌC HUYỆN NHÀ BÈ, THÀNH PHỐ HỒ CHÍ MINH - THỰC TRẠNG PHÁT TRIỂN ĐỘI NGŨ CÁN BỘ QUẢN LÍ CÁC TRƯỜNG TIỂU HỌC HUYỆN NHÀ BÈ, THÀNH PHỐ HỒ CHÍ MINH

The article mentions the situation of the development of the contingent of administrators in elementary schools in Nha Be district, Ho Chi Minh City. Survey’s results show that: the leadership of competent authorities, planning, training, retraining, appointment, re-appointment, rotation, transfer and dismissal of staff development managements are focused; The inspection, evaluation and implementation of remuneration policies and policies motivated the management team have many positive changes; Conditions on facilities and equipment are increasingly spacious and modern; Cooperation activities, links, exchanges of experience exchange have made certain changes. However, the planning, training and retraining of the adjacent management officials are still inadequate. The appointment, reappointment, rotation, transfer, dismissal and inspection and evaluation activities of the management staff are sometimes not good.

Perspectives and uncertainties

Distance-learning graduate programs go beyond the limits of academic training, restricted to obtaining a degree. Challenges and overcoming occur, not only in the search for qualification, for a career plan and following the company's' remuneration policy, but also due to the physical distance from major teaching centers. The great proposal is to supplant the frontiers of knowledge, in places where there is immense biodiversity, in contrast to geographical isolation. The objective of the study is to present the challenges and perspectives of the lato sensu graduate program at a University of the Brazilian Amazon, in the Municipal Public Management course in the state of Rondônia. The methodology used was that of review, as it seeks to describe, analyze and discuss scientific and technological knowledge already published. The review is basic and, it is expected that it will serve as support for scientific research and also, as support for theoretical reference. The course presented as a result works aimed at the better performance of the Management of the Municipalities of Rondônia. The research work developed by the students represents a local reality diagnosed with the search for managerially planned solutions.

Social partnership in ensuring decent labor remuneration

The paper focuses on the development of social partnership in the process of ensuring decent labor remuneration for employees. It highlights the development perspectives of the social partnership institute in the context of decent work concept implementation. The aim of the study is to evaluate and develop recommendations for improving the collective and contractual regulation of remuneration policy in Ukraine in view of the decent work concept. The analysis of the stages of social partnership development in Ukraine has proved that social partnership is currently characterized by features of the forming stage. Some characteristics of the development stage are also traced, but they have not yet fully manifested themselves in Ukraine. The analysis of the conditions for social and labor relations in Ukraine, the practice of collective bargaining procedures, the structure and content of collective agreements and contracts showed a low level of social partnership development and low social responsibility of social partners. The research showed that the practice of developing a compensation package at most enterprises was carried out without the participation of social partnership or with minimal participation. Existing social partnership practices cause inadequate social protection for employees and negatively characterize labor remuneration policy in terms of decent work. A number of proposals were developed to overcome the negative trends inherent in the institute of social part-nership and collective agreements at different levels. Recommendations include granting agreements the status of normative acts, regulating the procedure for concluding agreements at different levels, determining the procedure for informing employees about the content of agreements and contracts, and disseminating an ideology of social responsibility among social partners.

‘Say on pay’ regulations and director remuneration: evidence from the UK in the past two decades

ABSTRACT The UK was the first country to introduce so-called ‘say on pay’ regulation in 2002, by providing shareholders with an advisory vote on the Directors’ Remuneration Report. That approach recognised that disclosure alone was not an adequate regulatory response to the widening gap between directors’ pay and company performance nor to the broader political concern over the implications of this trend for social solidarity. A second stage in the evolution of the regime began in 2013 when shareholders were granted a binding vote on remuneration policy. In this article we present the results of the first longitudinal survey of the entire phase of ‘say on pay’ regulation in the UK to date. We examine the link between each stage of ‘say on pay’ regulation and the level and growth of directors’ remuneration. We conclude by linking our empirical evidence to broader developments in shareholder engagement with listed companies.

Testing the governance-performance relationship for the Tunisian banks: a GMM in system analysis

RationaleThis study aims to contribute to settling the lack of consensus regarding the determinants of bank performance, not only by considering bank governance, but also by including factors such as CEO compensation and risk management committee. Previous literature has included bank governance and considered only large banks in their surveys. The exclusion of other factors such as small- and medium-size banks may render the findings of these studies limited in applicability.ObjectiveThe objective of this paper is to examine the impact of internal governance on bank performance.MethodologyTo achieve this goal, we used annual data of a sample of ten Tunisian commercial banks listed in the Tunisian Stock Exchange observed during the period 1998–2015. We use the Generalized Method of Moments (GMM) to estimate the parameters of our econometric model.ResultsOur study finds that the correlation between the size of the board of directors, the state’s inclusion, and the presence of independent directors is positive and significant. On the other hand, we have found that CEO compensation, as well as foreign and institutional investors negatively affect the performance of the banks.Conclusions and implicationsTunisian banks are invited to broaden their size through appropriate restructuring, adopt new remuneration policies and define the optimal number of directors representing the state within the board of directors. Our results suggest managerial implications that can be of great value to ensuring the success of Tunisian banks. The latter should favor a higher presence of independent directors to reduce the bank control ineffectiveness caused by having a significant number of foreign and institutional investors in the board of directors.

The Institutionalization of Remuneration (A Case Study at the University X)

This study aims to understand the process of institutionalization that occurred in the University X (UX) with their remuneration policy, starting from the idea of remuneration, remuneration discourse preparation, implementation and dissemination of remuneration. This is a qualitative research with case study approach to gain an understanding of the process of remuneration institutionalization at the UX. The results of this study indicate that the process of institutionalization of remuneration at the UX was related to external and internal factors of the organization. Determination of the remuneration regulation is the external pressure which must be accepted by the UX because it has implemented public service institution (BLU) financial management system. The idea of improving the quality of public services which was followed by the remuneration policy discourse and its application were not running well for the UX should face internal pressure from lecturers. In addition, education staffs who still do not have the application performance measurement weakens the process of institutionalization.

Il say on pay in Italia: alcune riflessioni in vista del recepimento della direttiva SRD II

Il presente lavoro si concentra sull'analisi degli impatti derivanti dall'introduzione della normativa sul say on pay, sulla governance delle società quotate italiane, attraverso l'esame delle relazioni sulla remunerazione pubblicate nel 2012 e nel 2019 da un campione di primarie società del FTSE MIB. A distanza di sette anni dall'introduzione di tale normativa, è sembrato utile evidenziare, sia pure su di un piano meramente segnaletico e non statistico, l'evoluzione nell'approccio adottato in reazione al disegno delle politiche di remunerazione e al livello di disclosure offerto al mercato, oltre che nella gestione dei rapporti con gli azionisti sui temi di executive remuneration, senza tralasciare il ruolo assunto dai comitati per la remunerazione. Ciò con l'obiettivo di delineare i passi compiuti e la strada ancora da percorrere in vista dell'attuazione delle misure previste dalla Direttiva (UE) 828/2017, che comporterà rilevanti cambiamenti sui processi di definizione ed approvazione delle politiche di remunerazione degli amministratori delle società quotate.

Factors Affecting Employee Loyalty: A Case of Small and Medium Enterprises in Tra VinhProvince, Viet Nam

The study aims to identify the factors affecting employee loyalty in the case of small and medium enterprises (SMEs) in Tra Vinh province, Viet Nam and to find out critical factors affecting the loyalty of employees in SMEs. This is implemented with the method of collecting primary data of 320 employees working at SMEs in 5 districts including: Cau Ngang, Tra Cu, Chau Thanh, Cang Long, Tieu Can) and Tra Vinh City, Viet Nam. Using the multivariate regression method, the researchers have found 6 factors affecting employee loyalty: colleagues, leaders, job characteristics, remuneration policies, organizational culture, and working environment. Particularly, learning opportunities may not be not statistically significant for employees' loyalty towards small and medium-sized enterprises in Tra Vinh province. From the above research results, the authors have proposed implicational piolicies such as: focusing on colleague relationships, improving leadership of business owners, attaching importance to appropriate work arrangement, having appropriate remuneration policies for laborers, building effective organizational culture and working environment to improve employee loyalty at SMEs. From the above policy implications, helping business owners realize the aspirations of workers in small and medium-sized enterprises more closely in the future, in order to sustainably develop the business system in Vietnam.

O PSPN e a Composição da Remuneração dos Professores da Rede Municipal de Castanhal/PA a partir do PCCR/2012

In the historical context of the creation and implementation of career plans for the Brazilian teachers, the remuneration policy was more present in the educational legislations, with emphasis to the Nacional Professional Wage Floor (PSPN) Legislation. In this way, this text was aimed at analyzing the composition of the remuneration of municipal public education teachers of Castanhal, state of Para, Brazil, in force with the second career plan in the municipality, Municipal Law n. 026 of May 10, 2012 (PCCR/2012). For the reach of the objective, the methodology used was bibliographical research and document analysis. It was observed that the PSPN is important for the teachers appreciation, as it influences the definition of the annual and national value of the basic wage present in the composition of teachers remuneration. Thus, the teachers from Castanhal-PA had in their remuneration, between 2012 and 2016, the fulfillment of the PSPN.

Hacia un enfoque sostenible de retribución que incluya las expectativas de la población trabajadora

La guerra por el talento está sofisticando las estrategias de las empresas para atraer y fidelizar a los mejores profesionales. En este contexto, la retribución desempeña un papel destacado. Pero igualmente relevante es su significado cuando se habla de crear y/o aumentar la tasa de empleo decente, como enuncia el objetivo de desarrollo sostenible número 8, definido por Naciones Unidas para el 2030. Por ello, se hace pertinente revisar el concepto de retribución para que contribuya a un crecimiento económico más sostenible e inclusivo. Así, teniendo en cuenta las expectativas que la población tiene sobre un trabajo decente, el concepto sobre la retribución se ha ido ampliando desde un enfoque puramente monetario hasta adquirir un significado más amplio que abarca todos los beneficios percibidos por los trabajadores en su relación laboral. En línea con los resultados de algunos estudios realizados al efecto, este trabajo argumenta la conveniencia de incluir dichas expectativas en la definición de las políticas de retribución y, tenerlas en cuenta también, en las decisiones laborales, pues resultan ser altamente motivadoras contribuyendo al aumento de la productividad. Así, tras el análisis de la toma de decisiones en distintas situaciones laborales como la expatriación o, la decisión de cursar un MBA, se argumenta que las expectativas de los trabajadores desempeñan un papel relevante debiendo formar parte de una definición moderna, sostenible e inclusiva de retribución.

The Management of the Forests of the Dukes of Arenberg from 1600 untill 1820

With the rise of wood prices in Western Europe during the 17th and 18th centuries, forest owners could increase their revenues. The duke of Arenberg, who owned large forests in the Southern Netherlands, France and the Rhine area, managed to grasp this opportunity. By managing internal and external challenges, the dukes of Arenberg improved the production of their forests considerably over time. This article identifies four managerial changes that contributed to this change. First, the administrative structure and processes in the ducal organisation were upgraded. Second, remuneration policies were adapted to better align the interests of stewards and dukes. Third, the property rights over the forests became more exclusive and lastly, scientific insights percolated through the ducal administration proved beneficial for the forest management practices.

Methodological approaches to the formation and evaluation of the effectiveness of the remuneration policy in agricultural organizations

Methodological approaches to the formation and evaluation of the effectiveness of the remuneration policy in agricultural organizations

Uświadomiona i nieuświadomiona postać cienia organizacyjnego w komercyjnej organizacji medialnej

A Conscious and Unconscious Form of Organizational Shadow in a Commercial Media Organization The aim of the article is to explore and describe the organizational shadow in relation to the commercial media institution. The concept of shadow was introduced by Jung, who described it as the negative side of the human soul. As Bowles noted in 1991, this phenomenon can be applied to management sciences. The organizational shadow is created as a result of rejecting difficult, defective and uncomfortable elements of the institution’s identity, which can lead to the development of management pathologies. Interviews, which are the domain of qualitative methodology, allowed to distinguish organizational shadows in the commercial radio station, taking into account the causes and effects of their development as well as awareness of their existence among employees. The shadows include: unequal treatment of volunteer workers, giving up the development of young radio broadcasters, as well as a unjust remuneration policy. The conclusion of the article is indication the brand myth as the main reason for allowing the development of shadows.

The Difference between Senior Manager Compensation and Salaries of Full-Time Employees in Non-Management Positions on Corporate Governance in Taiwan

This study examines the impact of differences between senior manager compensation and salaries of full-time employees in non-management positions (DME) on corporate governance evaluation system (CGES). It seeks to understand whether corporate governance can consistently promote the success of company insiders, outsiders, and improve the corporate governance structure’s supervision. Empirical results show that DME has a positive influence on CGES in Big 4 CPA firms, which have better corporate governance evaluation levels. Deloitte, PWC, and KPMG have significantly better evaluation ratings of corporate governance. In addition, different types of conglomerate control for DME manager governance and co-governance have greater positive effects. Finally, non-change lead CPA, change concurring CPA, and non-change concurring CPA show that companies have better corporate governance evaluation. To encourage listed companies to attach importance to the level of corporate governance and assist in the effectiveness of capital market operations, a company should review and promptly implement an overall remuneration policy to comply with corporate governance trends. All listed companies can gradually implement and improve corporate governance to assist investors and other companies in understanding their effectiveness.

Long-term assessment of power capacity incentives by modeling generation investment dynamics under irreversibility and uncertainty

In actual energy-only markets, the high volatility of power prices affects the expected returns of generators. When dealing with irreversibility under uncertainty, deferring decisions to commit in new power plants, waiting for better information, is therefore a rational approach. Theoretical and empirical evidence suggests that such investment pattern determines the occurrence of construction cycles, which strongly compromise supply security. In order to supplement generators' revenues, several remuneration mechanisms have been devised over past years. Along this line, this work addresses the long-run dynamics of capacity adequacy and market efficiency with both a price-based and a quantity-based capacity remuneration policy. For that purpose, a recently-developed, stochastic simulation model is used as a benchmark. Hence, the optimal postponement of generation investment decisions is integrated into a long-run power market model by formulating the decision-making problem in the framework of Real Options Analysis. Results suggest that policymakers may exchange supply security (effectiveness) for energy prices to be paid by consumers (efficiency) when designing and implementing capacity remuneration mechanisms. By doing so, this article contributes to the ongoing debate regarding the design of incentive policies and efficient power markets by considering the microeconomics of investors’ decision-making under irreversibility and uncertainty.