Corporate Governance

Remuneration: From Economic Incentives to Common Sense

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This technical note is not intended to compete with the more than 50,000 books and articles, according to the Internet, already existing on the subjects of retribution, compensation and incentives, which include outstanding publications that have set excellent scientific and management standards. The vast majority regard remuneration as a means for designing systems that attract, retain and motivate employees and executives and align those interests with those of other individuals affected by the company's success in the short, medium and long term. The authors' initial objective for this paper is to help entrepreneurs and executives to think in managerial terms when making decisions on how and how much to pay their employees, within the broad context of the many other decisions involved with running a company. Secondly, they aim to offer operational criteria for finding one's way through the dense, perilous jungle of remuneration policy, since remuneration is about more than just money. It is also primarily about the styles and values of the company's management, culture and strategy.
Bibliographic citation: Stein, Guido; Martín, Miguel, "Remuneration: From Economic Incentives to Common Sense", IESE, DPON-134-E, 07/2016
Date: 13/07/2016
Author(s): Stein, Guido; Martín, Miguel
Document type: Technical Note
Department: Managing People in Organizations
Languages: Spanish / English

Learning objective Use with cases of remuneration and motivation.