Purchase Solution

Valley Commercial Bank motivational incentive formulas

Not what you're looking for?

Ask Custom Question

Valley Commercial Bank wants to reward its branch bank managers for exceeding revenue growth targets and is considering alternative incentive formulas that award bonuses as a percentage of salary for each percentage point that actual revenue growth exceeds the target as follow.

FORMULA PARAMETER ALTERNATIVE 1 ALTERNATIVE 2
Revenue growth target 5% 10%
Bonus percentage 4 percentage points 8 percentage points

Require:

a. What are the motivational advantages and disadvantages of each of the four incentive formulas?

b. What are the advantages and disadvantages of the incentive formula approach to motivation revenue growth.

Purchase this Solution
Solution Summary

The expert examines Valley Commercial Bank motivational incentive formulas.

Solution Preview

There isn't much difference in the four formulas, just magnitude.

A. The advantage of the formulas are that the managers will focus on new sales, new clients, new projects and be aggressive about it. The disadvantage is that ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Introduction to Finance

This quiz test introductory finance topics.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

View More Free Quizzes
Related BrainMass Solutions

  • Mathematics - Finite Mathematics

    205408 Finite Mathematics for Commercial and Business Loans A bank has set aside a maximum of $25 million for commercial and home loans.

  • Banks and interest rates and capital requirements

    Why does imposing bank capital requirements on banks help limit risk taking? Banks are highly levered institutions, which create an incentive to take excess risk.

  • Human Resource Issues at Valley National Bank

    If unsuitable people are recruited at the Valley National Bank, they will adversely affect the performance, and culture of the bank. For all round improvement the selection of personnel at Valley National Bank must be appropriate.

  • Major Tools for Directing Monetary Policy

    If the Fed pays more for a bank to maintain its reserves, then the bank gets a profit, but it gives encouragement for that money to sit idle in the banks accounts. If the rate is lower, then the banks have incentive to lower their reserves.

  • Incentive and Instinct Theories

    189424 Motivational Theory Identify the individuals associated with the incentive and instinct theories. A brief explanation of each theories motivational elements would also be helpful. Thank you.

  • Tapscott and Williams Electronic Commerce

    The content of the solution must not therefore be passed on as your own work for grading or commercial purposes. You can also use the listed resources to explore your topic further.

  • Motivational theories for employee incentives

    93982 Impact of Motivational Theories and Non-Monetary Incentive Program: The use of incentives for performance improvement:. Evaluate the impact of motivational theories on the design of performance management plans.

  • Workplace Motivation Essay

    Extrinsic motivation includes incentive structures and/or verbal encouragement. Examine how various motivational strategies affect productivity in the workplace of a managed care insurance company.

  • Ethical Issues In Financial Services

    535563 Ethical Issues In Financial Services What are two conflicts of interest faced by an Investment Advisor who is employed by a commercial bank or an investment bank?

View More Related Solutions