EMPLOYESS RELATIONS

Employee Relations

Employee Relations

Question: 01 Critical Analysis of Factors Which Determine Pay and Conditions

Top Company Executive

The term company executive is defines as individuals or group of individuals allotted and given the accountability to supervise the associations of an organization and the influence to make assessments within particular boundaries. The appropriate pay and condition plan for top company executive is important to the performance of the company. According to the Agency theory, the pay and condition of top executive in the large organizations are observed as an endeavor to give them a guide of rewards and compensation that supports their concerns more likely with shareholders all together (Buck et.al 2003, pp. 1709-1727).

The sympathy of total pay and condition of executives to performance of share price has become the conformist standard for sentence regarding whether packages of reward do certainly serve concern of shareholders or company executives themselves. The long-term incentive plan which was introduced in 1995 in United Kingdom have forced novel, specific firm conditions related to performance on company executives. LTIPs also helps to increase the sensitivity of performance pay system, nonetheless, they also offers the top company executive new chances to influence the phrases of LTIPs in their own goodwill, at the outlay of shareholders (Buck et.al 2003, pp. 1709-1727).

The committee is appointed by the board of directors of large organizations who set the pay of the executives. The pay of the company executives includes salary, long term and short term benefits and bonuses. Different types of recommendations are also given by the committee on the pension structure of the company. Some of the organizations have separate committee for the pension structure. The basic function of the committee of compensation program is to make certain that the pay programs support the objectives of the company and enhance the performance of the company executives (Anonymous 1987, p.72). The company CEO and executives are rewarded to the extent that they are because they are accountable for the company performance. If the executive done their job in the effective manner than the board increases their pay, but if they done their job badly than also board will not decrease their pay (Minow 1991).

There are different political and economic factors which determine the pay and condition of the top company executives. The pay of the company top executives has the vital consideration from both the political and economical consideration. Politics is a significant determinant of performance of organization because the policies of the government affect predictable future cash flows and organizations must maneuver within the limits of ruling restraints (Aslan & Grinstein 2012, pp.1-2). The pay and condition of the company top executives is increase or decrease on the nature of the political and economical factors. The case of the recession the pay of the company executive is not decreasing as compare to the other workers of the organizations. There is no recession of the executive of the company (Uchitelle 1991). Economic boom has also the significant impact on the pay structure of ...