There are two methods of accounting stock-based compensation as follows: The intrinsic value method: This method measures compensation expense as the excess, if any, of the quoted price of the stock at the measurement dare over the amount of which the employee must pay to acquire the stocks. Where the exercise price of the stock is equal to or grea...

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Types of Stock-Based Compensation:  The term “stock-based compensation” is a wide term which embraces the compensation of an employee in stocks options, stock appreciation rights and other stock-based related awards. Broadly, stock-based compensation can be classified into two follows: Restricted stock plan: The most traditional type of restricted ...

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Equity participation through employee stock plans constitutes an essential part of compensation packages offered to reward employees. Stock options are to purchase a specified number of shares of a company’s stock at a specified price (called the exercise or a stoke price) for a specified period of time (called the potion period or life of the poti...

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Organization wide incentive plans involve cooperation among employees, management and union in order to achieve broader objectives such as organization wide reduction in manpower, materials and supply cost, strengthening of loyalty to the organization, harmonious industrial relations, and deceased turnover and absenteeism. The group wide incentive ...

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Organizations are increasingly devising performance linked compensation systems to induce employee’s performance and productivity which is essential for creating and sustaining competitive advantage. There is generally agreement on the need for rewards and recognition to form part of any effective performance management system. Employee’s knowledge...

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Approaches to Rewarding Performance: Performance management is a way to motivate the employees on both individual performance and on group performance. Performance management is increasingly becoming popular due to the realization of importance of keeping competent and dedicated personnel instead of to the realization of importance of keeping compe...

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Performance Appraisal system must be well-defined, corporately supported and monitored. It must be widely communicated and focused towards achieving corporate objectives. In essence, a performance appraisal system must be integrated achieving corporate objectives. In essence, performance appraisal system must be integrated as part of a performance ...

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What are the Sources of Performance Appraisal: Combination of group and Individual appraisal: Performance appraisal evaluates employees who frequently aspire to improve their performance rather than their service. To avoid this situation, teamwork is necessary. In some cases, individual appraisal is needed and in others, group appraisal is needed. ...

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Compensation is need for survival and human satisfaction. Pay dissatisfaction can lead to a number of individual and organization problems as discussed below: High Turnover: If employees are not paid according to the position they hold, their skills, competencies and performance, then employees will become dissatisfied with compensation and search ...

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Theories of Job Satisfaction: These theories are related to job satisfaction and then explore the linkage of compensation and employee satisfaction. Comparison Theory: This theory specifics that employees compare what their jobs should provide (e.g. promotions and compensation)to what they currently receive from their jobs.  However simple need com...

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