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LONDON, ENGLAND, May 18, 2012 /24-7PressRelease/ -- A BBC report on 11 May 2012 revealed a study by Obermatt which found that pay packages designed to incentivise FTSE 100 chief executives had little effect on company performance. Live Innovations observed the researchers compared profit growth and total shareholder return against the total realised pay earned by bosses between 2008 and 2010 which found many top earners severely underperformed in relation to pay packages.
There is much discussion regarding CEOs and their pay packages, whether it is in banking and finance or other sectors. Multiple investigations into the unfair pay packages show some companies reward their senior staff, all the while making huge cuts in other areas to be able to afford it.
Live Innovations, Managing Director Tom Harris says, "There are many ways you can incentivise people. I find money to be a temporary motivator; don't get me wrong, we all need to pay the bills... but I personally am far more motivated by personal growth, and recognition... I don't feel enough companies structure their business around rewarding the people who do the biggest job, and sometimes people deserve more than money."
In the book, Drive, written by Daniel H. Pink, he discusses the three values that truly drive people deep down, autonomy, mastery and purpose. Autonomy is being able to take on more responsibility and control over your career. Mastery is developing a set of skills and becoming more proficient at your work and purpose is being part of something more than just a function in a business, knowing individual's efforts and work are going towards higher purpose. Tom Harris, Live Innovations managing director says, "These are key areas that are often severely neglected in corporate environments, most people want to know their effort is appreciated, I think Live Innovations has really taken Daniel H. Pinks philosophy, my basic motto is, people who feel appreciated produce results."
Commenting on different ways companies can incentivise their workforce, Managing Director of Live Innovations, Tom Harris says, "There are many different incentive options available for employers, for SMEs and multinational companies alike... I honestly believe people care for something a lot more when it is their own. I am a huge fan of rewarding people for their efforts, I think people should be given stock options or cut into percentages of profits, that way the management team, and the workforce are all working toward a similar goal which is ideally to see the company grow. When everyone has their eye on the same prize, it is unlikely the company will fail."
Live Innovations conclude that when employee pay packages are not tied to the success of an organisation, the purposes of the individuals change from a common goal to an individual needs. Live Innovations suggest this can been seen in many of Britain's largest companies; many times when individual needs come before the company's success, it can result in lack of growth, loss of jobs, and harm to the British economy.
Source: Obermatt Report
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