approximately 100 words Greenworks Ltd wants to focus on ‘people, profits, planet’. The board of directors...

approximately 100 words

Greenworks Ltd wants to focus on ‘people, profits, planet’. The board of directors has proposed linking top managers’ pay to broad measures of environmental sustainability, and worker and customer satisfaction. The board proposes that bonuses for management will be linked to targets such as the reduction of greenhouse gas emissions and energy use, the introduction of new environmentally friendly products and improvements in workforce morale.

Required

Advise the board of the two (2) potential positive implications and two (2) potential negative implications of the proposed remuneration policy.

Solutions

Expert Solution

The Advantages Of This Remuneration Policy

A)Increased Effeciency: As the top management pay is directly linked with the enviornment sustainability. The top management will work more effeciently so that they get more bonus by working effeciently.

B)Pay Tied to Work:If this remuneration policy is applied then every employees work will determine the pay he will get. the work done will decide his pay. So, the more the employees will work for attaining the objectives of the company the more they will be paid.

Disadvantages of this remuneration Policy:

A)Unpredictable Expenses: The employees to earn more pay may use more resources or extensive use of resources which will generate more unpredictable expenses for the company. As the company is not predicting how much resources the employees going to use and for gaining more bonus the employees may use more than required resources means wastage of resources.

B)Increase In Price of Product: To produce more enviornment friendly products the company have to achieve more effecient production techniques and may require new technologies and reseach and developement plan which will add to the cost of production and increase the expenses of the company. Thus, it will increase the price of the product.

ekkarill92 answered 2 years ago

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