The Managerial Theories Essay Example | Topics and Well Written Essays - 1750 words

The Managerial Theories - Essay Example This paper covers the inherent conflict between providing costly incentives to motivate managers to perform well, against the overall profit motive of the firm. In analysing this conundrum, the author will call on the different kinds of motivational tools available to the Managing Director and the Board of Directors of a firm, and how those tools are regarded both by the managers whose incentives are affected, and the shareholders of the firm, who are presumably trying to maximise their gain (Griffith 2000).  As income taxes have risen over the past historical era, the outright impact of salary or bonus increases has been moderated somewhat. The incremental tax on income in the UK and the US is at about 50%, hen all local and national income taxes are taken into account. Thus the standard supply and demand relationship demonstrates a curve, as shown below. Since taxes climb with income, the curve’s change in slope is more pronounced:  As compared to the turn of the last ce ntury, when income taxes were less than 10%, the total impact of increases in wages has therefore moderated. The second influence on this moderation has been the increase in the value of leisure time (Kokoski 1987). As the value of leisure hours has increased, the amount which needs to be paid to offset the value of leisure time has also increased, all else being equal.  Group incentives can take the form of income increases (salary and bonus) or non-monetary rewards, such as additional vacation days. From a microeconomics standpoint, there is no difference between group pay incentives and individual pay incentives. There are psychological differences which can be substantial, however, depending on the type of performance being rewarded.   An extreme example of the point above is an individual whose personal rewards far exceed those of the group.

An analysis of the idea of measuring and reporting human capital in Essay

An analysis of the idea of measuring and reporting human capital in the balance sheet - Essay Example 77). Companies including human capital will improve the companies’ goodwill in the external and internal environment. The political economy of the firms will improve when the company illustrate its relationship with different skilled employees since the society will appreciate the move by the firm to treat its employees in the best ways possible since they are part of the society. The company that includes training of its employees in the financial reports creates better coexistence with the government thus increasing their good reputation and in return generate more profits since the government helps it in training and developing employees who are skilled to produce quality goods (Blair 1999, pg. 43). It is important for a company to include equity to portray it does not discriminate against the physically but skilled employees or recruits creates a better image that will shape the scope of the market stock prices. Gender equality will portray better correlation with the society, which is important in expanding their company on its improved goodwill (Wyatt & Frick 2010, pg. 213). The inclusion of human capital in a financial report is very beneficial to firms thus this essay shows the reason behind exclusion of such a beneficial factor in the financial reports of most companies. Financial reports are responsible to portray the company’s financial activities and the best way the company is able to allocate its resources. This information is important to the shareholders or investors, competitors and the society. The shareholders who invest money in the company should have the knowledge of the composition of the employees the company operates with to ensure they make justifiable judgments on the funds to invest (Sveiby 1997, pg. 137). If the company prove that, the employees are talented, innovative, skilled and self-motivated, the shareholders will invest more funds since they are sure the employees at hand will generate more profits making the