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a) b) One of the key issues associated with management control is the alignment of the organisation's interests with those of the management of the
a) b) One of the key issues associated with management control is the alignment of the organisation's interests with those of the management of the organisations (goal congruence). Normally, this is achieved with a compensation plan that rewards executive management for good nancial performance. Agency Theory explores how contracts and incentives can be created to motivate individuals to achieve goal congruence. Other theories related to the issue of motivation include Herzverg's Hygene Factors and Expectancy Theory. Discuss in detail, how these theories of motivation help managers to design and implement reward systems. (7 marks Suggested time 21 minutes) Describe and discuss the advantages and disadvantages associated with each of the following incentive compensation schemes. (i) Individual incentive plans such as salary increases, bonuses, or other nonnancial rewards. (ii) Prot Sharing andlor Gainsharing plans (iii) Share option plans (iv) Team based incentive plans. (8 marks - Suggested time 24 minutes) (TOTAL 15 MARKS)
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