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Is the Executive Pay System 'Bust'?

Is the Executive Pay System 'Bust'?

Imagine a business entity with ineffective rewarding system, as well as, organizational success? This is illusionary in the real world corporate practices. Building and managing human capital effectively is a challenge. Yet, the making of such human capital provides the organization with most sustainable competitive advantage in the long run. The dynamism of the corporate world of today holds employee productive system very significant and competitive (Meira, 1996, pp. 9-10). An effective rewarding and incentive system is a very significant determinant of employee performance, as well as, organizational effectiveness. However, the implementation of effective reward system pertains to the single-most effective way of integrating employee capabilities and competencies in work-related actions. However, the implementation of rewarding system is no easy task (Lawler, 1993, pp. 6-7). It encompasses of certain challenges and obstruction for any organization. These challenges are discussed as under; Assessing employee perceptions and attitudes

Assessing employee perceptions and attitudes

The most fundamental challenge lies with implementation of an effective rewarding system pertains to the assessment of employee perceptions of reward, as well as, their attitudes towards rewarding system.

Establishing fairness

The rewarding system has to assure of fairness and equity by depicting criteria where employees believe that their input is considered to the greatest possible extent (Metcalf, 2005, pp. 4-5).

Market competitiveness

The rewarding system should be compatible with market competitiveness. Companies who are pay leaders tend to build higher morale human capital that yields great productivity at work.

Integrating compensation and benefits

Another significant area of employee rewarding system pertains to compensation and benefits. Effective rewarding system pertains to compensation and benefits that are tailored to individual needs of an employee and vary from employee to employee (Metaforce, 2004, pp. 1-2).

Knowing the motivating factor

For every individual, the drivers of work and ...