ECN 204 Lecture Notes - Lecture 3: Restricted Stock, Employee Retention, Golden Handcuffs
Document Summary
The apportioning of accountability for financial results within the organization. Planning and budgeting to define performance expectations and standards for evaluating performance. To define the links between results and various organizational incentives. Individuals are believed to be more strongly motivated by the potential of earning rewards than by the fear of punishment. Based on the performance in the current year or less. Based on the performance measured over periods greater than 1 year and often related to the company"s stock price. Based on performance in the current year or less. For example, 2% of sales; 10% of net profits. For example, 60% of target bonus at 80% of target; 100% of target bonus at 100% of target (where target bonus = 30% of salary) Based on the performance measured over periods greater than 1 year. Accounting performance (e. g. , eps, roe, roa) over a period of 3 5 years. Inducing effort: getting employees to work hard.
