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How Effective Are Bankers Bonuses - Assignment Example

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The paper "How Effective Are Bankers Bonuses" is a great example of a finance and accounting assignment. Bankers Bonus was rewards or appreciations offered to individuals or groups who performed extraordinarily during a specific banking season. The bonuses incentivized and encouraged risk-taking because they provided favorable opportunities for hard work and dedication…
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Extract of sample "How Effective Are Bankers Bonuses"

How effective are banker’s bonuses? Institution Instructor Due date Section 1 - Secondary Research Log Group members 1 2 3 4 The boxes below should be expanded electronically. Please indicate contributions from individual team members, either by using your initial, or a variety of (readable) font colors 1 Write the full assessment brief and research question here Research question: How effective are banker’s bonuses? Bankers Bonus was rewards or appreciations offered to individuals or groups who performed extraordinary during a specific banking season. The bonuses incentivized and encouraged risk taking because they provided favorable opportunities for hard work and dedication towards the achievement of the banking industry objectives. However bonuses were to be performance related and became regulated if the banks made losses. Research was done using a number of sources which included academic journals sources like publications of relevant articles from global banking institutions ; textbooks sources which included relevant study area material; Proquest Sources coverage which included industry and professional newsletters, school of bank marketing papers and theses. In order to retain the skilled personnel in the industry, the bonus programs must demonstrate favorable external and internal competition. Effective bonus plan encompasses noble leadership, reasonable and fairly shared bonuses. These payment systems are planned and managed well to achieve goals like efficiency and equity. 1.2 Expand on and define the terms in the research question. Identify the main topic in the question and the specific focus of that topic. Note down the conceptual area/s of the Dewey System you might expect to find the main topic in the research question (75-150 words) Bonus – this were rewards and gratitude given to individuals who demonstrated and outshone outstanding performance in an area they represent. Bankers’ bonuses- this are rewards given to people and individuals who have significantly contributed enormously to the success of the banking sector. The Types of bank bonus can be either in monetary and non-monetary terms. Monetary bonus rewards incorporated the additional allowances on individual salary scales while the non-monetary rewards were in terms of promotions in the workplace within the banking industry. 1.3 Make a bulleted list of keywords and search strings which you feel will generate results in the hunt for information. Add to this list as your search progresses and you identify other keywords. Bonus Monetary bonus Bank bonus Promotions Rewards Incentives Allowances Types of bank bonuses Effects of bonus schemes 1.4 Include here any relevant research from hard copy or ebook monographs in the Regents University library (relevant information from a single monographic source should be paraphrased/summarised in 150-250 words but you may include more than one monographic source if available) Include end-of-text Harvard references. Brigham (1985) stated that it’s merely the workforce whose performance had extensively impacted on the corporate’s best results were qualified for motivation bonuses. The majority of companies use individual ranking, the wages and remuneration grades in efforts of trying to give a definition of the quantity of rewards to be offered. This criterion usually focuses on the size of the banking industry .Therefore in order to achieve the desired banking industry aspirations; probable awards must be considerable enough to provide rapid achievement of the banking industry short and long-range objectives. Furthermore reasonable salaries and bonus, are beneficial to the workforce because the play a role of attracting, retaining, and motivating workers. This eventually leads to high quality work output hence meeting principles of fairness and personal accountability. The Bonus targets to motivate utmost hard work and they should be ambitious because if the aspirations are too high, they can create general struggle and strain in the banking industry hence viewed to be unattainable therefore discouraging. There is need for calculations to be done to ensure that the bonuses do not exceed the planned income in that financial year because they would cause downfall and ultimate collapse of the banking sector. 1.4.1 Insert here scanned copies of the precise pages used to make the summaries in 1.4 1.5 Include here relevant research from peer-reviewed academic journal papers using the library databases (each named group member to contribute a paraphrased summary [100-150 words] of 2 research papers within the library databases. For each source, author name, date, title, title of journal and numeration should be clearly indicated through an end-of- text Harvard reference. Frederick and Heiman ( November 20, 2008) in journal concerning designation of effective bonus programs conclusively stated that suitable financial analysis was essential because bonus offers were more effective if there is a short time-frame set between accomplishments of the corporate objectives and payment of those associated bonuses. This reliable information created the needed environment focused at ensuring the desirable attitude to be achieved. According to European Banking Authority’s journal by (Matt Lavine, 16th October, 2014) workers were awarded allowances based on how better they are at workplace and the allowances were subject to changes and would last for period of one year. The employees were to be catered of in terms of their working conditions and the associated payment adjustments this will make the low wage-earners to be passionate and dedicate their efforts. Effective risk management practices needed to be in place to ensure that those who befall victims of circumstances in their struggle to achieve corporate goals were compensated accordingly. 1.5.1 Insert here copies/screenshots of the relevant pages from which summaries were made in 1.5 (these should be clearly cross-referenced) 1.6 Include here relevant research from Proquest sources (each named group member to contribute a paraphrased summary [100-150 words] of one newspaper article. For each source, author, date,, title of newspaper should be clearly indicated through an end-of- text Harvard reference) Proquest banking sources help the involved to foretell expectations in the market trends, monitor the rise of future contest, and even study trends that have worked effectively in the financial markets of the banking industry. Information gathering help in resolve bonus problems early because the regular update curb and advance bonuses for each operational unit in efforts to create employee satisfaction and outstanding performance. According to chase bank report (2nd April, 2015), bonuses and promotions were availed with regard to existing personal inspection, personal investments and the account balances in the United States banks. Furthermore, the Financial Times Newspaper (6th April, 2015) stated that bonuses created government struggles in efforts of trying to deal with bank heads and to retain pressure from the public sector related to bonus pay-outs. 1.6.1 Insert here copies/screenshots of the precise pages from which summaries were made in 1.6 (these should be clearly cross-referenced) 1.7 Include here any relevant research from textbook sources on the shelves of the RU library (relevant information from a single textbook source should be paraphrased/summarised in 150-250 words but you may include more than one monographic source if available) Include end-of-text Harvard references. According to Willemijn de Jong (2013) in his article, “Regulation Of Banker Bonuses” asserted that if proper remuneration and continued pay of bonuses is essential because it would encourage responsibility hence attract the best staff and thrive in the global financial markets. Evaluation which was done in a number of banking institutions proofed that the bonus culture encouraged short-range risk-taking which was geared towards attaining of the corporate objectives within a short financial season. The bonus culture created internal contest within the banking industry because of the strain and struggle which was created by the benefits defined as pay for hard work and sacrifice. This made other employees to invent new ideology and methodologies which would positively transform the sector to compete favorably in the global markets (Richardson, 2011) 1.7.1 Insert here scanned copies of the precise pages used to make the summaries in 1.7 1.8 Include here any relevant research from websites (relevant information from a single website source should be paraphrased/summarised in 100-150 words but you may include more than one website). Include end-of-text Harvard references and state why you feel each website is a reliable source. Effective bonuses have helped the banking industry to attract and retain highly qualified and talented employees who are self motivated .The employees in turn facilitate a rapid achievement of banking goals and in the process, they include their innovative ability and creativity which is significant in the way the banking sector is growing and obtaining the global customer retention. It’s implicit that any sector which has taken an initiative to design an incentive or promotion scheme is focused at making the industry grow within a short time and establishment favourable terms of competition. The banking industry executives should design bonus awarding programs on its staff and customers with regard their responsibilities and the level of investment in the sector. The bankers who have invested or banked their annual bonuses and wages for the employees should be desirable enough to give them more reason to invest more and attain loyalty in the banking industry (Eccles and crane, 1988) 1.8.1 Insert here scanned copies of the precise pages used to make the summaries in 1.8 1.9 Include here any relevant additional information from audio or visual media (relevant information from, for example, a radio or TV programme should be paraphrased/summarised in 100-150 words but you may include more than one source). Include end-of-text Harvard references. According to BBC News ( 22 sep, 2008) financial analysts have predicted that banks are in great risk of subjecting their performance to a crisis because of the nature of changing bonus rates and this is likely to make them loose the target market and the prospected customer attention. With regard to analysis done on bank risks by Greuning and Brajovic Bratanovic (2009), stated that workers were motivated by the bonus factor and deliver in the sections they represent because they were aimed at utilization of the benefits which were attained as a result of effort sacrificing and commitment to the objectives. This is because if personal effort is not given the required recognition, it declines and the employees do not give their best at workplace, it will be significant in the prospected end results and profit levels. Section 2 – Synthesis 2.1 In this section, briefly note down any theories identified in section 1 around the topic area Agency theory; this theory justifies the big bonuses therefore generating a lot of discussions about their maximization, maintenance and stability. Positive management theory also centers on employees’ motivational factors and how they can be affected through managing skills in order to achieve corporate goals (Azevado and Akdere, 2011). 2.2 In this section, further reduce the summaries in section 1 to summaries 20-30 words in length. Each summary should give the gist of the source. Note down an appropriate in-text reference next to each summary. 2.3 Re-organise/cut-and-paste/re-group these summaries into coherent groups which could form the basis for paragraphs Agency an positive management theories provide the required motives and direction towards achievement of the short and long term goals of the banking industry 2.4 Write a paragraph plan for your synthesis, based on your re-organised groups in 2.2 Proper scrutiny should be done using the existing theoretical frameworks to ensure that bonuses are made effective to the bankers and the banking industry in general 2.5 Now write the synthesis including in-text citations and end-of-text Harvard references (350 – 450 words excluding references) Financial crisis created divisibility in the bonuses offered because they were dependent on the years of fortune which came to pass. These fortune years were signified by consistent high profits and dominance of the banking sector but seasons of losses followed and still bonuses were still payable. It implied that these banks were not performance oriented but they aimed at retaining the workforce and the taxpayers were now accountable for funding the bonuses indirectly. This has negatively affected the banking sector because it has created the need for retention of employees during the hard financial times. The effects of the quota bonus and evaluation tests have been instrumental for creation of jobs and improvement of the working conditions which have demonstrated transparency and full efficiency in the sector. It is imperative to present the bonus programs in document form to avoid misunderstandings and disorder; therefore it is beneficial to both the employees and their employers. The bonus program requires attention and dedication in order to ensure that the objectives are met within the stipulated time to provide a good environment for speculation and more improvements hence achievement is made a possibility. For instance, if one makes invests a lot of money, the more likely he or she expects more returns from the investment to facilitate settlement of bonuses and assist in improving the quality of services and profits attained. If the business makes frequent losses, it’s likely to have little or no bonus because bonuses are born from the extra achievement apart from what was prospected in a certain financial period. Frequent losses discourage the workers because it hinders them from achieving their goals and therefore they are likely leave the business or institution so that they can get opportunities elsewhere. Therefore, in order to retain the skilled personnel in the industry, the bonus program must demonstrate favorable external and internal competition. The competition keeps the employees on toes so as for them to reach the expected organizational levels. This makes them work hard to and capitalize of their efforts towards great aspirations. For a bonus plan to be successful, it encompasses noble leadership, reasonable and fairly shared bonuses. These payment systems are planned and managed well to achieve goals like efficiency and equity (Bavoso, 2012). (List of references) Bavoso, V. (2012). Explaining financial scandals: corporate governance, structured finance and the enlightened sovereign control paradigm. Chiline, V. V. (2002). Modern trends in global banking development. USA, Dissertation, com. Cullen, J. (2014). Executive compensation in imperfect financial markets. Cheltenham, Edward Elgar. Eccles, R. G., & Crane, D. B. (1988). Doing deals: investment banks at work. Boston, Mass, Harvard Business School Press Greuning, H. V., & Brajovic Bratanovic, S. (2009). Analyzing banking risk: a framework for assessing corporate governance and risk management. Washington, D.C., World Bank Willemijn de Jong (2013) Financial world: bankers ' bonuses for the economic. Newyork Richardson, J. (2011). From recession to renewal: the impact of the financial crisis on public services and local government. Bristol, UK, Policy Press. Researchomatic ,Compensation And Effectiveness Of Bonuses Swatridge, C. (2014). The Oxford guide to effective argument and critical thinking. Robins, P. K., & Spiegelman, R. G. (2001). Reemployment bonuses in the unemployment insurance system: evidence from three field experiments. Kalamazoo, Mich, W. E. Upjohn Inst. for Employment Research Read More
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