Chief Executive Officers Compensation Essay Example | Topics and Well Written Essays - 2000 words

Chief Executive Officers Compensation - Essay sampleThe term human resource management is not new. It has been widely used by scholars and managers to refer to the amaze of policies designed to maximize organizational integration, employee commitment, flexibility and quality of work4. In the sections that follow, I will attempt for each one of the questions as requested and there after I will provide a brief conclusion.In economic literature, the significance of information asymmetries, innovation and strategic behaviour has long been recognised. There exists a right smart literature on how incentives affect a variety of management problems and the methodology for analysis of incentive problems virtually notably the confidential information agent model (Turner and Muller 2006). CEOs are paid based on the telephone circuit description given to them and since in America it is often believe that, they are the leaders they want others to emulate. In addition, it of all time costs more to hire a new person than keep the old one. Osborne, Hyman & motherfucker (2006451) substantiate further that an effective human resource policy is not only to find adapted workers but also to motivate and effectively manage them, is recognised as important for the viability of the organisation.They argued thThey argued that, problems emanating from conflict of interest are virtually general to all cooperative activities amongst individuals whether or not they keep in a hierarchical fashion as suggested by the principal agent analogyBecause principal and agents are utility maximisers, there is every reason to believe that the agent will not always act in the best interest of the principal (Jensen 200386). This attempts to draw out contractual problems that can get as a result of agents acting opportunistically when their interest departs from those of their principal (Jensen 2003). Thus, agency theory provides us with the judicious for an effective human resource managemen t policy. Thus, if American CEOs are paid more than their Japanese counterpart, it is besides their own way to handle the opportunistic behaviour of the agent. Hyman & Jack stated that Corporations in the States save in two ways that much every year from an even more outrageous loophole, what executive excess 2008 dubs the unlimited task deductibility of executive pay. Top companies can essentially