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In general, incentives are anything that persuade a person or organization to alter their behavior to produce the desired outcome. The laws of economists and of behavior state that higher incentives amount to greater levels of effort and therefore higher levels of performance. For comparison, a disincentive is something that discourages from certain actions.
Seniority is the state of being older or placed in a higher position of status relative to another individual, group, or organization. For example, one employee may be senior to another either by role or rank, or by having more years served within the organization. The term "seniority" can apply to either concept or both concurrently.
The merit system is the process of promoting and hiring government employees based on their ability to perform a job, rather than on their political connections. It is the opposite of the spoils system.
The principal–agent problem refers to the conflict in interests and priorities that arises when one person or entity takes actions on behalf of another person or entity. The problem worsens when there is a greater discrepancy of interests and information between the principal and agent, as well as when the principal lacks the means to punish the agent. The deviation from the principal's interest by the agent is called "agency costs".
Personnel economics has been defined as "the application of economic and mathematical approaches and econometric and statistical methods to traditional questions in human resources management". It is an area of applied micro labor economics, but there are a few key distinctions. One distinction, not always clearcut, is that studies in personnel economics deal with the personnel management within firms, and thus internal labor markets, while those in labor economics deal with labor markets as such, whether external or internal. In addition, personnel economics deals with issues related to both managerial-supervisory and non-supervisory workers.
An agency cost is an economic concept that refers to the costs associated with the relationship between a "principal", and an "agent". The agent is given powers to make decisions on behalf of the principal. However, the two parties may have different incentives and the agent generally has more information. The principal cannot directly ensure that its agent is always acting in its best interests. This potential divergence in interests is what gives rise to agency costs.
Many both in and outside Japan share an image of the Japanese work environment that is based on a "simultaneous recruiting of new graduates" and "lifetime-employment" model used by large companies as well as a reputation of long work-hours and strong devotion to one's company. This environment is said to reflect economic conditions beginning in the 1920s, when major corporations competing in the international marketplace began to accrue the same prestige that had traditionally been ascribed to the daimyō–retainer relationship of feudal Japan or government service in the Meiji Restoration.
Performance-related pay or pay for performance, not to be confused with performance-related pay rise, is a salary or wages paid system based on positioning the individual, or team, on their pay band according to how well they perform. Car salesmen or production line workers, for example, may be paid in this way, or through commission.
Merit pay, merit increase or pay for performance, is performance-related pay, most frequently in the context of educational reform or government civil service reform. It provides bonuses for workers who perform their jobs effectively, according to easily measurable criteria. In the United States, policy makers are divided on whether merit pay should be offered to public school teachers, and other public employees, as is commonly the case in the United Kingdom.
Lockstep is a kind of marching that involves all marcher's legs moving in the same way at the same time.
The term clawback or claw back refers to any money or benefits that have been given out, but are required to be returned due to special circumstances or events, such as the monies having been received as the result of a financial crime, or where there is a clawback provision in the executive compensation contract.
Commissions are a form of variable-pay remuneration for services rendered or products sold. Commissions are a common way to motivate and reward salespeople. Commissions can also be designed to encourage specific sales behaviors. For example, commissions may be reduced when granting large discounts. Or commissions may be increased when selling certain products the organization wants to promote. Commissions are usually implemented within the framework on a sales incentive program, which can include one or multiple commission plans.
Dewey & LeBoeuf LLP was a global law firm headquartered in New York City, United States. The firm was formed in 2007 through the merger of Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae. Dewey & LeBoeuf was known for its corporate, insurance, litigation, tax, and restructuring practices. Some of the firm's leaders were indicted for fraud for their role in allegedly cooking the company's books to obtain loans while hiding the firm's financial plight. At the time of its bankruptcy filing, it employed over 1,000 lawyers in 26 offices around the world.
Executive compensation is composed of both the financial compensation and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variable performance-based bonuses and benefits and other perquisites all ideally configured to take into account government regulations, tax law, the desires of the organization and the executive.
Jeffrey L. Kessler is a partner at the international law firm Winston & Strawn, where he also serves as Co-Executive Chairman and co-chair of the firm's antitrust/competition practice and is a member of the firm's executive committee. Until May 2012, he was the global litigation chair at the international law firm Dewey & LeBoeuf, where he was also the co-chair of the sports litigation practice group and served on the firm's executive and leadership committees. His major clients include the Panasonic Corporation, National Football League Players Association (NFLPA), the National Basketball Players Association (NBPA), William Morris Endeavor, Activision Blizzard, Avanci, the Major League Baseball Players Association (MLBPA), United States Women's National Team (USWNT) soccer players, NTN Corporation, Relevant Sports, and Actors' Equity Association.
Compensation and benefits (C&B) is a sub-discipline of human resources, focused on employee compensation and benefits policy-making. While compensation and benefits are tangible, there are intangible rewards such as recognition, work-life and development. Combined, these are referred to as total rewards. The term "compensation and benefits" refers to the discipline as well as the rewards themselves.
Pay-for-Performance is a method of employee motivation meant to improve performance in the United States federal government by offering incentives such as salary increases, bonuses, and benefits. It is a similar concept to Merit Pay for public teachers and it follows basic models from Performance-related Pay in the private sector. According to recent studies, however, there are key differences in how pay-for-performance models influence federal employees in public service roles. James Perry is one scholar who has conducted such studies. His research reveals that public servants tend to be more intrinsically motivated, and thus, are prone to have a negative reaction to monetary incentives. There is still debate, however, on what exactly makes the public sector different.
In the United States, the compensation of company executives is distinguished by the forms it takes and its dramatic rise over the past three decades. Within the last 30 years, executive compensation or pay has risen dramatically beyond what can be explained by changes in firm size, performance, and industry classification. This has received a wide range of criticism leveled against it.
Employer compensation in the United States refers to the cash compensation and benefits that an employee receives in exchange for the service they perform for their employer. Approximately 93% of the working population in the United States are employees earning a salary or wage.
Wage transparency, salary compensation, and compensation transparency generally, involves disclosure of employee compensation amounts, either among other employees in an organization, to owners, to government regulators, or to the public.
References
- ↑ Neil, Martha (2009-03-16). "Illustration Of A Lockstep Progression Income Distribution Plan Tied To Objective Performance Criteria". Article. John P. Weil & Company. Archived from the original on 2000-01-15. Retrieved 2013-01-31.
- ↑ "Some Law Firms End Lockstep Pay for Associates, as Economy Plummets". ABA Journal . American Bar Association. Archived from the original on 2009-07-06. Retrieved 2009-08-14.
- ↑ Cotterman, James D. (June 2007). "Lockstep Compensation: Does It Still Merit Consideration" (PDF). Report to Legal Management. Altman Weil, Inc. p. 3. Archived (PDF) from the original on 2012-08-08. Retrieved 2013-01-31.
- ↑ Bruce, Debra L. (May 18, 2012). "Partner Compensation Plans – The Modified Lock Step". Article. Lawyer-Coach.com. p. 1. Archived from the original on 2012-08-29. Retrieved 2013-01-31.
- ↑ DiPietro, Dan (November 17, 2009). "The Shifting Associate Paradigm". Article. The AmLaw Daily. p. 1. Archived from the original on 2010-11-16. Retrieved 2013-01-31.
- ↑ Elinson, Zusha (June 29, 2007). "Howrey to Ditch Lockstep Compensation for Merit-Based Model". Law.com. Archived from the original on 2021-04-19. Retrieved 2022-06-10.
- ↑ Dias, David (2012-09-27). "Lockstep vs. Eat-What-You-Kill: Compensation statistics highlight Dewey LeBoeuf's folly". Lexpert Magazine - Blog. Archived from the original on 2022-06-10. Retrieved 2022-06-10.
- ↑ Gosseries, Axel P. (2004). "Are seniority privileges unfair?". Economics and Philosophy. 20 (2): 279–305. doi:10.1017/S0266267104000215. ISSN 0266-2671.
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