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Hi sir, for P1 December 2011 exam question 3(a) , regarding the factors that might influence the level of reward for Mrs Evans after the privatisation.
In the answer key, I don’t understand point 3 and 4.
Point 3: It states that the influencing factors are previous performance in the job (if relevant) and the outcomes of performance reviews. This basically refers to the skills and experience of Mrs Evans right? How will this affect the level of her reward after privatization ?
Point 4: It states “where a CEO is highly visible or in charge of a politically-sensitive organisation, the opinions of stakeholders is sometimes a constraint on what can be paid.”
What does a highly visible CEO mean ? and what is a politically sensitive organization ?
Point 3 What is being said is that if Mrs Evans previous performance had been mediocre her remuneration shouldn’t rocket up just because of privatization. Privatization might make the organisation attractive to a new range of candidates and we don’t have to pay an outrageous amount just to keep her. If she was a star employee, then we need to keep her and would be more prepared to increase remuneration.
Point 4 If the CEO is likely to attract publicity and press interest it is more likely that there will be adverse comments if remuneration seem high.
okay. So for point 3 i can gain marks by stating the following right ?
Previous performance in the job
Mrs Evans has been a highly competent CEO with excellent strategic and communication skills, ever since the company was owned by the state. Because of her good performance previously, the remuneration committee not only decided to recommend her retention in post but also the substantial pay increase, in the hope that she will perform well in the future.
Am i correct ?
how her previous performance influences her level of reward.:
because she performed well previously, an increased pay was proposed.in the hope that she will perform well in the future .
am i right ?
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