HRM textbook

420 PART 4 COMPENSATION
82. Christine Bevilacqua and Parbudyal Singh,
Pay for Performance Panacea or Pandoras
Box? Revisiting an Old Debate in the
Current Economic Environment, Compensation
& Benefits Review, September/
October 2009, pp. 21 26.
83. www.forbes.com/2010/06/14/goldmansachs-paulson-markets-lloyd-blankfein.
html, accessed May 21, 2011.
84. Under IRS regulations, companies cannot
deduct all golden parachute payments
made to executives, and the executive must
pay a 20% excise tax on the golden
parachute payments. Final Regs Issued for
Golden Parachute Payments, Executive
Tax and Management Report 66, no. 17
(September 2003), p. 1.
85. Conseco Not Alone on Executive Perks,
Knight-Ridder/Tribune Business News,
August 28, 2003, item 03240015. See also
Realities of Executive Compensation
2006/2007 Report on Executive Pay and
Stock Options, www.watsonwyatt.com/
research/resrender.asp?id=2006-US-
0085&page=1), accessed May 20, 2007.
86. Other suggestions are as follows: equal
payments to all members on the team;
differential payments to team members
based on their contributions to the team s
performance; and differential payments
determined by a ratio of each group
member s base pay to the total base pay of
the group. See Kathryn Bartol and Laura
Hagmann, Team Based Pay Plans: A Key
to Effective Team Work, Compensation &
Benefits Review, November December
1992, pp. 24 29. See also Charlotte
Garvey, Steer Teams with the Right Pay,
HR Magazine, May 2002, pp. 70 71, and
K. Merriman, On the Folly of Rewarding
Team Performance, While Hoping for
Teamwork, Compensation & Benefits
Review 41, no. 1 (January/February
2009), pp. 61 66.
87. Richard Seaman, The Case Study: Rejuvenating
an Organization with Team
Pay, Compensation & Benefits Review,
September/October 1997, pp. 25 30. See
also Peter Wright, Mark Kroll, Jeffrey A.
Krug, and Michael Pettus, Influences of
Top Management Team Incentives on
Firm Risk Taking, Strategic Management
Journal 28, no. 1 (January 2007),
pp. 81 89.
88. K. Merriman, On the Folly of Rewarding
Team Performance, While Hoping for
Teamwork, Compensation & Benefits
Review, January/February 2009, pp. 61 66.
89. As another example, see, Bernd Irlenbusch
and Gabriele K. Lünser, Relative
Rewards within Team-Based Compensation,
November 2006. IZA Discussion
Paper No. 2423. Available at SSRN:
http://ssrn. com/abstract=947075, accessed
May 21, 2011.
90. Seongsu Kim, Does Profit Sharing Increase
Firms Profits? Journal of Labor Research,
Spring 1998, pp. 351 371. See also Jacqueline
Coyle-Shapiro et al., Using Profit-
Sharing to Enhance Employee Attitudes:
A Longitudinal Examination of the
Effects on Trust and Commitment,
Human Resource Management 41, no. 4
(Winter 2002), pp. 423 449.
91. Alberto Bayo-Moriones and Martin -
Larraza-Kintana, Profit Sharing Plans and
Effective Commitment: Does the Context
Matter? Human Resource Management 48,
no. 2 (March April 2009), pp. 207 226.
92. Kaja Whitehouse, More Companies
Offer Packages Linking Pay Plans to
Performance, The Wall Street Journal,
December 13, 2005, p. B4.
93. Under the U.S. tax code, any arrangement
that provides for the deferral of
compensation in a year later than the year
in which the compensation was earned
may be considered a deferred compensation
arrangement. Steven Friedman,
2008 Compliance Strategies for Employers
in Light of Final 409A Regulations,
Compensation & Benefits Review, March/
April 2008, p. 27.
94. www.axa-equitable.com/retirement/
how-do-company-profit-sharing-planswork.html,
accessed June 1, 2011.
95. Joseph Martocchio, Strategic Compensation
(Upper Saddle River, NJ: Prentice
Hall, 2006), pp. 163 165.
96. Brian Graham-Moore and Timothy Ross,
The Scanlon Way to Improved Productivity:
A Practical Guide (New York: Wiley, 1978),
p. 2. For a review of potential problems,
see Denis Collins, Death of a Gainsharing
Plan: Power Politics and Participatory
Management, Organizational Dynamics 24
(Summer 1995), pp. 23 37.
97. These are based in part on Steven
Markham, K. Dow Scott, and Walter Cox
Jr., The Evolutionary Development of a
Scanlon Plan, Compensation & Benefits
Review, March/April 1992, pp. 50 56.
See also Woodruff Imberman, Are You
Ready to Boost Productivity with a Gainsharing
Plan? To Survive and Prosper
in Our Hyper-competitive Environment,
Board Converters Must Motivate Employees
at All Levels, Official Board Markets
82, no. 47 (November 25, 2006), p. 5(2);
and James Reynolds and Daniel Roble,
Combining Pay for Performance with
Gainsharing, Healthcare Financial Management
60, no. 11 (November 2006), p. 50(6).
98. Markham et al., The Evolutionary
Development of a Scanlon Plan, p. 51.
99. Barry W. Thomas and Madeline Hess
Olson, Gainsharing: The Design Guarantees
Success, Personnel Journal, May 1998,
pp. 73 79; A. C. Gardner, Goal Setting and
Gainsharing: The Evidence on Effectiveness,
Compensation and Benefits Review
43, no. 4 (July/August 2011), pp. 236 244.
100. Paraphrased from Woodruff Imbermann,
Boosting Plant Performance with Gainsharing,
Business Horizons, November
December 1992, p. 77. See also Max
Reynolds and Joane Goodroe, The
Return of Gainsharing: Gainsharing
Appears to Be Enjoying a Renaissance,
Healthcare Financial Management 59,
no. 11 (November 2005), p. 114(6); and
Dong-One Kim, The Benefits and Costs
of Employee Suggestions Under Gainsharing,
Industrial and Labor Relations
Review 58, no. 4 (July 2005), p. 631(22);
hospital gainsharing discussion in Anjana
Patel, Gainsharing: Past, Present, and
Future, Healthcare Financial Management
60,no.9 (September 2006),pp.124 128,130.
101. Paul Rossler and C. Patrick Koelling,
The Effect of Gainsharing on Business
Performance at a Paper Mill, National
Productivity Review, Summer 1993,
pp. 365 382; hospital gainsharing discussion
in Anjana Patel, Gainsharing: Past,
Present, and Future, Healthcare Financial
Management 60, no. 9 (September 2006),
pp. 124 128, 130.
102. See for example, http://www.dol.gov/dol/
topic/health-plans/erisa.htm, accessed
October 2, 2011.
103. Steven Etkind, ESOPs Create Liquidity for
Share Holders and Help Diversify Their
Assets, Estate Planning 24, no. 4 (May
1998), pp. 158 165. See also S. Coomes,
Employee Stock Plans Can Save Taxes,
Attract Talent, Nation s Restaurant News
42, no. 36 (September 15, 2008), p. 12.
104. William Smith, Harold Lazarus, and
Harold Murray Kalkstein, Employee Stock
Ownership Plans: Motivation and Moral
Issues, Compensation & Benefits Review,
September/October 1990, pp. 37 46.
See also ESOP Trustees Breached Their
Fiduciary Duties Under ERISA by Failing
to Make Prudent Investigation into Value of
Stock Purchased by ESOP, Tax Management
Compensation Planning Journal 30,
no. 10 (October 4, 2002), p. 301(1); and
J. D. Mamorsky, Court Approves ERISA
Action Against ENRON Executives, Trustee,
and Plan Auditor for Retirement Plan
Losses, Journal of Compensation and Benefits
20, no. 1 (January February 2004),
p. 46(7); G. Ledford, et al., The Effects of
Stock Ownership on Employee Attitudes
and Behavior: Evidence from the Rewards
of Work Studies, Journal of Compensation
& Benefits 20, no. 2 (March/April 2004),
pp. 24 30.
105. James Sesil et al., Broad-Based Employee
Stock Options in U.S. New Economy
Firms, British Journal of Industrial Relations
40, no. 2 (June 2002), pp. 273 294.
106. Eric Dash, Time Warner Stops Granting
Stock Options to Most of Staff, The New
York Times, February 19, 2005, item
128921996.
107. Peter Kurlander, Building Incentive Compensation
Management Systems: What
Can Go Wrong? Compensation & Benefits
Review, July/August 2001, pp. 52 56. The
average percentage of payroll employers
spent on broad-based performance pay
plans rose till 2005, and then has fallen for
the past few years. Companies Pull Back
from Performance Pay, Workforce Management,
October 23, 2006, p. 26. For one
of many good discussions of why pay for
performance tends to be ineffectual, see