Article Summary
On January 19, 2019, the Financial Times published the story of how Morgan Stanley was planning to reward the chief executive officer Mr. James Gorman for helping the company hit its financial targets. Morgan Stanely Board mentioned that the bank was willing to raise Gorman’s pay by $2 million pushing his pay of 2018 to $29 million. While Mr. Gorman base salary will remain unchanged, the firm will raise his bonus by $1.2 million which lead to a total bonus of $6.9 million. The rest of the reward would be in form of deferred stock and equity. According to the board of the bank if the firm is able to hit the top end of its return on equity target. The board noted that the chief executive was behind the company’s success in 2018. As a motivation to the Gorman, the company said that it would increase the bonus for outstanding individual performance. Besides the financial problems that the banking system experienced in the last quarter of the year, the company was able to outperform its competitors Goldman Sachs and Citigroup (Armstrong, 2019).
Course Topic Integration
The course topic on reward system we learned that money has been used as a form of reward for a long time now. Money has been viewed as a reward for long. Money has been said to influence people ( Butler & Rose, (Eds.). 2011) . In modern days companies have diversified the reward system and one of the most valued methods is pay for performance. In the article, Mr. Gorman drives motivational of meeting the organizational goals from the reward given to him by his bosses who are the board members. The Board member knows that Mr. Gorman will push his employees to provide results so that he can cash in bonuses (Armstrong, 2019). Besides the base salary, organizations use money inform of commissions, bonuses, and employee prizes. The strategy used by Morgan Stanely to reward Mr. Gorman is a combination of pay performance. The company uses individual incentive pay plans. Morgan Stanely rewarded Mr. Gorman individually besides having a team behind him which contributed to the success of the organization. The firm employed both the use of bonuses and stock options. Mr. Gorman was awarded $1.2 million bonus in cash and the rest of his bonuses were used to buy stock inform of differed stock and equity units of the company.
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Views and Opinions
Companies have the responsibility to compensate the employees for the services they provide. Compensations are forms of motivators to the workers ( Mullins, 2007) . Human behavior shows that people are motivated by various thing ranging from money, friendly working conditions to job security. Money is the biggest motivator to most of the working group. The case study chosen has shown that organizations use the money to motivate their employees. Organizations have diversified money as a form of motivation ( Huczynski, Buchanan, & Huczynski, 2013) . Human resource management has studies the human behavior over the years and realized money is the biggest motivator to the working majority. It is, therefore, necessary for businesses to use the money to diversify the reward system. Firms like Morgan Stanely however, look discriminatory as we have not heard about low-level employees being a reward. When board members reward executive members and forget the ground workers it becomes unfair. When an organization meets its target, everybody should be a reward to keep the motivation.
References
Armstrong, R. (2019). Morgan Stanley increased James Gorman’s pay by 7% in 2018 . Financial Times. New York.
Butler, M., & Rose, E. (Eds.). (2011). Introduction to organisational behaviour . Kogan Page Publishers.
Huczynski, A., Buchanan, D. A., & Huczynski, A. A. (2013). Organizational behaviour (p. 82). London: Pearson.
Mullins, L. J. (2007). Management and organisational behaviour . Pearson education.
