DCU Business School - Developments at DCUBS
DCU Business School
Brian Harney questions the future role and nature of executive incentive packages
27th August 2009
Whether similar basic principles and
market punishments have been heeded in the corporate world is an
open question. The signs among those who have survived and prospered
are not encouraging. This year investment banks such as Goldman
Sachs are likely to reward their employees with record breaking
bonus payments fuelled by a dramatic upsurge in profits.
To criticise firms for benefiting
from the economic crisis would be a bit rich, this is simply
capitalism in action. Yet to offer excessive rewards on the back of
this should set alarm bells ringing.
Financial incentives, if they are to
be used, should reward value enhancing activity - to reward on any
other basis is to make linkages and understanding between
organisation strategy and management behaviour weaker rather than
Getting this basic principle right
should come more easily to organisations. Getting it wrong might
mean offering rewards for something that has not been earned or,
even more concerning, risks rewarding undesired behaviours.
Child's play or not, one would have hoped that the era of spoilt executives was over and done with.