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Value based management incentive

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Explain what a company must do in order to successfully implement a value based management incentive program. Give an example of this newly developed program.

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Solution Summary

Performance evaluation for giving incentives is explained in a structured manner in this response. The answer includes references used.

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To successfully implement a value based management incentive program the company must set up a more direct link between the management and its shareholders. The company must monitor value created and pay incentives based on value created or destroyed in the existing business. It is expected that such an incentive program will compel the mangers to deploy capital efficiently. Those projects that add most value are pursued. ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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