Performance-based compensation vs. guaranteed compensation: contractual incentives and performance

Top management from retail banks must delegate authority to lower-level managers to operate branches and service centers. Doing so, they must navigate through conflicts of interest, asymmetric information and limited monitoring in designing compensation plans for such agents. Pursuant to this delegation, the banks adopt a system of performance targets and incentives to align the interests of senior management and unit managers. This paper evaluates the causal relationship between performance-based salaries and managers’ effective performance. We use a fixed effects estimator to analyze an unbalanced panel of data from one of the largest Brazilian retail banks during the period from January 2007 to June 2009. The results indicate that agents with guaranteed variable salary contracts demonstrate inferior performance compared with agents who have performance-based compensation packages. We conclude that there is a moral hazard that can be observed in the behavior of agents who are subject to guaranteed variable salary contracts.

Changes to the REIQ contract and conveyancing case law update

The Reference Schedule to the REIQ houses and land contract and the lots in a Community Titles Scheme (“CTS”) contract has been amended to contain provision for disclosure concerning the installation of an approved safety switch. This section will not be required to be completed if the land is vacant (in the case of the houses and land contract) or if the present use is a commercial use (in the case of the lots in a CTS contract).

Shariah perspective on marriage contract and practice in contemporary Muslim societies

Forced marriages are worldwide phenomena and also exist in Pakistani society. It involves the lack of free and full consent of at least one of the parties to a marriage. Mostly, females are victims of forced marriages. It is prevalent in the name of religion in many Muslim countries; however, it is purely a traditional and cultural phenomenon which has nothing to do with religion. Forced marriages are different from arranged marriages in which both parties freely consent to enter into marriage contract and they have no objection on the choice of partner selected by their parents. This study will highlights different forms of forced marriages in Pakistani society.

Principles to guide sustainable implementation of extended-scope-of-practice physiotherapy workforce redesign initiatives in Australia: Stakeholder perspectives, barriers, supports, and incentives

Sustainable implementation of new workforce redesign initiatives requires strategies that minimize barriers and optimize supports. Such strategies could be provided by a set of guiding principles. A broad understanding of the concerns of all the key stakeholder groups is required before effective strategies and initiatives are developed. Many new workforce redesign initiatives are not underpinned by prior planning, and this threatens their uptake and sustainability. This study reports on a cross-sectional qualitative study that sought the perspectives of representatives of key stakeholders in a new workforce redesign initiative (extended-scope-of-practice physiotherapy) in one Australian tertiary hospital. The key stakeholder groups were those that had been involved in some way in the development, management, training, funding, and/or delivery of the initiative. Data were collected using semistructured questions, answered individually by interview or in writing. Responses were themed collaboratively, using descriptive analysis. Key identified themes comprised: the importance of service marketing; proactively addressing barriers; using readily understood nomenclature; demonstrating service quality and safety, monitoring adverse events, measuring health and cost outcomes; legislative issues; registration; promoting viable career pathways; developing, accrediting, and delivering a curriculum supporting physiotherapists to work outside of the usual scope; and progression from "a good idea" to established service. Health care facilities planning to implement new workforce initiatives that extend scope of usual practice should consider these issues before instigating workforce/model of care changes. © 2014 Morris et al.

Industrial water pollution in Dhaka, Bangladesh: strategies and incentives for pollution control in small and medium enterprises

The extent and gravity of the environmental degradation of the water resources in Dhaka due to untreated industrial waste is not fully recognised in international discourse. Pollution levels affect vast numbers, but the poor and the vulnerable are the worst affected. For example, rice productivity, the mainstay of poor farmers, in the Dhaka watershed has declined by 40% over a period of ten years. The study found significant correlations between water pollution and diseases such as jaundice, diarrhoea and skin problems. It was reported that the cost of treatment of one episode of skin disease could be as high as 29% of the weekly earnings of some of the poorest households. The dominant approach to deal with pollution in the SMEs is technocratic. Given the magnitude of the problem this paper argues that to control industrial pollution by SMEs and to enhance their compliance it is necessary to move from the technocratic approach to one which can also address the wider institutional and attitudinal issues. Underlying this shift is the need to adopt the appropriate methodology. The multi-stakeholder analysis enables an understanding of the actors, their influence, their capacity to participate in, or oppose change, and the existing and embedded incentive structures which allow them to pursue interests which are generally detrimental to environmental good. This enabled core and supporting strategies to be developed around three types of actors in industrial pollution, i.e., (i) principal actors, who directly contribute to industrial pollution; (ii) stakeholders who exacerbate the situation; and (iii) potential actors in mitigation. Within a carrot-and-stick framework, the strategies aim to improve environmental governance and transparency, set up a packet to incentive for industry and increase public awareness.

The Economics Of Civil Law Contract And Of Good Faith

Prepared for the Symposium in honour of Michael J. Trebilcock, 1-2 October 2009, in Toronto

Freedom of contract and the coexistence of trademark registrations in Colombia

In trademark systems such as the Andean Community, a state authority verifiesthat the marks are distinctive, lawful and do not affect third parties, and after that,given their ownership. In this context, particular interest has sparked the possibilityof individuals by agreements or statements of co-existence, are who ensure that theirsigns meet the conditions for simultaneous registrations.Such agreements for the coexistence of marks are problematic if one thinks thatthe holders of interests that would be available also seem to matter to consumers,competitors and the market. Therefore, define the scope of contractual freedom inthe field of trademark law, whose rules are considered imperative, acquire practicaland theoretical importance because its realization i) recognizes the risks that maybe relevant to evaluating trade agreements and ii) contributes to debates on the roleof private autonomy in areas reserved for non-derogable norms. Thus, this researchputs the declarations of consent for the coexistence of registrations in Colombia, ina larger scope of the limits of freedom of contract.

Contracts and incentives in the construction sector

The aim of this chapter is to examine what the construction sector brings to our understanding of the procurement of complex performance. The chapter is divided into the following parts: fi rst, an overview of the various matters that contribute to the complexity of construction procurement is provided. Second, the most important contractual incentive schemes found in construction contracts are discussed, and this is followed by, third, an examination of the changes associated with the shift towards procuring complex performance (PCP) (service provision). Fourth, the main findings of the authors’ recent research on PCP contracts are summarised, followed by the conclusion. It should be noted that the procurement of services is referred to as ‘PCP’ in this chapter.

Monitoring and incentives of executives in risky firms : a test of the association with firm performance

This study investigates the relationship between a firm's risk and the effectiveness of the firm's corporate governance practices. Previous research investigating the relationship between corporate controls and firm performance has been mixed and often weak. Therefore, this study sets out to determine the efficiency of monitoring and incentive contracts given certain characteristics of the firm. That is, the study sets out to determine whether risk firms with higher monitoring and levels of incentives are associated with higher firm performance.
The results of this study of 282 firms demonstrate how the relationship between firm risk and performance is associated with the monitoring and incentive contracts used by these firms. In particular, the results of this study showed that the negative association between risk and firm performance is weakened when firms have stronger monitoring and incentive mechanisms. The particular contribution of this study is to show that the role of corporate governance variables infirm performance should be evaluated in the context of the firm's risk.

Police stress : the role of psychological contract and perceptions of fairness

Purpose – The overall purpose of this paper is to examine the extent to which breaches in psychological contracts and perceptions of organizational fairness account for variations in job stress experienced by operational police officers (as measured by psychological distress and employee performance), after controlling for the variance associated with more established job stressors (i.e. job demands, job control and social support).

Design/methodology/approach – This study is based on data collected through a self-report survey involving operational members of a large Australian police force (n=582).

Findings – Results of hierarchical multiple regression analyses indicate that vast majority of explained variance in psychological distress and extra-role performance is attributed to the additive effects of demand, control, and support. Furthermore, only one of the social exchange dimensions (interpersonal fairness) is predictive of either target variable.

Research limitations/implications – The limitations that need to be taken into account are the cross-sectional nature of the study design and the focus on a single police service.

Practical implications – Despite the generally weak support for the social exchange variables, there are signs that dimensions of justice (particularly interpersonal justice) should be included in future police-stress investigations. The results also suggest that job characteristics such as job demand, job control and social support should be taken into account when developing strategies to prevent and/or reduce chronic job stress in policing services.

Originality/value – This is one of the first studies to examine the relationships between psychological contract breach, perceptions of fairness and police stress.

The brazilian education quality index (Ideb): measurement and incentives upgrades

The increasing availability of social statistics in Latin America opens new possibilities in terms of accountability and incentive mechanisms for policy makers. This paper addresses these issues within the institutional context of the Brazilian educational system. We build a theoretical model based on the theory of incentives to analyze the role of the recently launched Basic Education Development Index (Ideb) in the provision of incentives at the sub-national level. The first result is to demonstrate that an education target system has the potential to improve the allocation of resources to education through conditional transfers to municipalities and schools. Second, we analyze the local government’s decision about how to allocate its education budget when seeking to accomplish the different objectives contemplated by the index, which involves the interaction between its two components, average proficiency and the passing rate. We discuss as well policy issues concerning the implementation of the synthetic education index in the light of this model arguing that there is room for improving the Ideb’s methodology itself. In addition, we analyze the desirable properties of an ideal education index and we argue in favor of an ex-post relative learning evaluation system for different municipalities (schools) based on the value added across different grades