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Performance Management Systems and Strategies by Dipak Kumar Bhattacharyya

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USE OF PERFORMANCE CRITERIA FOR DESIGNING EXECUTIVE COMPENSATION

Use of performance criteria to design executive compensation, account for measurable performance targets, behaviour, job requirements, and experience of the executives, job role, peer compensation, market considerations, and the size of the organization. Table 8.2 clearly explains the same.

These criteria are then studied in the context of the time span and the nature of measurement. Time span may be long- or short-term compensation. The nature of measurement, on the other hand, accounts for profitability vs. market-based measures, qualitative vs. quantitative measures, etc. (Gomez-Mejia & Balkin, 1998).

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