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3822-incentive based systems

I am working on answering the following questions:

1. Rewards for performance can be based on current performance results (short-term) or future performance results (long-term). List one advantage and one disadvantage of both and give example of each.

2. Should the bank manager of ACB bank be evaluated based on the performance of the manager?s branch bank alone, or only on the performance of the bank as a whole, or both? Explain

3. Discuss the advantages and disadvantages of basing rewards on a fixed formula (i.e. for each percentage point by which deposit growth exceeds 5 percent, the manager would receive a bonus of 10% of the manager?s base salary) and subjective manner? Using ACB as an example, identify when one method (fixed formula or subjective) may be more appropriate.

4. Assume you are a consultant advising ACB on their incentive compensation plan. Your interviews with branch and department managers inform you that employees are satisfied with the new balanced scorecard performance management system, but feel they are not rewarded for performing well. At the end of each year, most employees receive annual salary increases between 3 and 5 percent. Promotions are based on seniority?the longer you are in your job, the better your chances for promotion. Do the interview responses signal a potential problem? If so, what do you recommend that ACB do?

5. Develop a student grading model for an accounting class using the Balanced Scorecard concepts.

Solution Preview

HI, I will give some ideas for each question
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<br>1. Rewards for performance can be based on current performance results (short-term) or future performance results (long-term). List one advantage and one disadvantage of both and give example of each.
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<br>- Long term rewards could be in the form of bonuses at the end of the year (a nice pay check) or maybe a nice trip, new car...
<br>- Short term reward could be a small pay bonus after a successful week or a company party after a great month
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<br>Both types of reward are excellent in motivating workers - short term rewards may boost employee moral which might then further boost productivity. Long term rewards are also excellent - they allow employees to have long term goals, and the employees can work to strive these goals.
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<br>2. Should the bank manager of ACB bank be evaluated based on the performance of the manager?s branch bank alone, or only on ...

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