Opening up the black box: a UK case study of top managers' attitudes to tbeir performance related pay

Morris, Timothy J. and Fenton-O'Creevy, Mark (1996). Opening up the black box: a UK case study of top managers' attitudes to tbeir performance related pay. International Journal of Human Resource Management, 7(3) pp. 708–720.

DOI: https://doi.org/10.1080/09585199600000151

Abstract

This paper examines the attitudes of the top managers within one large financial services organization in the UK to fixed and variable components of their compensation package. The rationale for performance-related pay for senior managers is to align their interests with those of the shareholders, but little is known about the views of top managers on the effectiveness of such incentives. The results suggest that the design of effective bonus systems is not just a technical issue: perceptions of market fairness with respect to the compensation package and the clear communication of goals are important in getting senior managers to focus on shareholder interests.

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