Group Report: Performance measures, remuneration and motivation
Subject Learning Outcomes (LOs) assessed (from Subject Outline):
a) Analyse the roles of cost and management in organisations through the analysis of accounting concepts and tools
b) Evaluate and apply financial and non-financial performance measures and tools used in assessing and rewarding individual and corporate performance
c) Describe how management control theory and concepts apply to organisational settings through the generation of accounting and organisational reports
A Marking Rubric is attached so you are aware of exactly how your submission will be marked.
Most of the second half of this subject focusses on how firms can measure performance and in turn, reward effort through bonus and incentive schemes, often using accounting concepts and tools (LO a) and LO b). It is important that firms have a clear understanding of what their overall corporate strategy is and set targets for performance in line with those goals and in line with the Mission and Vision Statement.
Background to task topic:
Every Australian Public Company must produce a ‘Remuneration Report’ detailing how their highest paid executives’ remuneration (pay) has been calculated. This includes details of fixed versus at-risk (or variable) remuneration and the methods used to make these awards. Each company must nominate Board Members to form a ‘Remuneration Committee’ (some companies may use different names for this committee) and generally the members consist of at least two non-executive members of the Company’s Board plus the Chairperson. (Each student should check the composition of the committee relevant to their allocated company and briefly report the details in their report in the company overview.)
The Committee’s role is to determine and approve the remuneration policy, the methods and amounts of executive compensation including the base salary and benefits.
The details of the remuneration scheme are published in the Remuneration Report within the Annual Report for the company and then voted on by shareholders at the annual general meeting. If more than 25% of shareholders ‘vote down’ (against) the remuneration plan, the Board must revise the plan and if this revised plan is still rejected by shareholders at the next General Meeting, the Board’s position in considered ‘untenable’ (unacceptable) to the shareholders and typically must offer their resignation.
Key questions to be answered:
After a comparison has been completed, as a group, critically review both methods and analyse which methodology is believed to produce the following:
a) How the performance measurement measures may affect the ethical behaviour and the culture of the organisation;
b) Which performance measures are likely to have the greatest motivational impacts on management behaviour; and
c) An evaluation of the Financial and Non-Financial measures in achieving desirable outcomes, i.e. those ‘aligned’ with shareholder outcomes.
The following is a Report Format that should be adopted by each group. More details will be given in the Week 6 briefing.
Please note: The research conducted by examining the Annual Reports of the companies MUST also be matched to research of academic articles assessing the effectiveness of Executive Remuneration schemes and methods!
The word count will depend on the number of students in the group. The absolute minimum number of words PER STUDENT is 500 and a maximum in 750. Therefore, a group with four members should submit a report (excluding cover pages, references and appendices) of between 2000 and 3000 words, if FIVE members, then between 3000 and 3750 words.
NO MORE than 4000 words will be marked! (Appendices excluded from the word count.)
WHAT MATERIAL IS REQUIRED TO BE SUBMITTED?
Group Report (2/3 of assignment mark)
Each group is to research and contribute to a group report that includes the following:
1. Research of the Academic Literature using EBSCOHOST and/or other Academic Search Engines and discover academic articles discussing methods of measuring
Executive Performance. (Note in the USA, remuneration is referred to as Executive Compensation or Executive Pay so you may wish to substitute this term in your searches.)
2. Research and discover the corporate goals of each of the company reviewed. (Review the Chairman and CEO’s Statements in the Annual Report and the Corporate Website for this information.)
3. Research and discover how the senior executive are having their performance assessed. This may be limited to only the TWO top earning Executives, usually the CEO and CFO.
NOTE – DO NOT REVIEW THE REMUNERATION OF THE BOARD OF
DIRECTORS ONLY THE EXECUTIVE TEAM/KEY MANAGEMENT PERSONNEL (KMP)
4. Research commentary on the company’s performance and you may include some of these materials provided they are fully referenced. E.g. Use screen grabs using the Windows ‘Snipper’ Tool may be used to capture these images. Only a FEW (no more than THREE!) should be entered into your report and these MUST be fully referenced.
5. Reflect and COMPARE the information given between the methods used by the Company and the methods identified by your research of the literature. Thoroughly report your findings and present your comparisons.
6. Your group should write up your findings AND conclude if your company is being truly transparent and if it is producing a ‘good’ result for the shareholders. In essence, you are concluding whether you believe their management control systems are working
7. Present your final analysis of the Company’s remuneration methods.
8. Conclude with your overall findings in relation to the three areas of focus given.
Submitting your written group report
The Report will require that you use Microsoft Word to format and complete the task.
This assessment task is marked progressively. There are THREE steps to submitting your assignment:
1) The Group is to form by Week 6 – any student not in a group will be subject to a 2 Mark Penalty from the final group score.
2) The DRAFT Group Report is to be submitted using Turnitin BEFORE your Tutorial in Week 8 to obtain a Turnitin Score and then PRINT the Turnitin score and submission receipt. Once you have a printed copy of your submission
receipt and Turnitin score, you MUST bring this as a printed copy to class along with a hard (printed) copy of your report as submitted to Turnitin. (5 GROUP Mark Penalty if the draft is not submitted and the above complied with in Week 8.)
Your draft report will be briefly reviewed in class in Week 8 and your draft will be reviewed in class in Week 8. Please note that this is a “hurdle requirement” for final submission of your assignment. (That means, that you MUST show your draft AND Turnitin receipt with Turnitin Score in Week 8 to qualify to have your assignment submission marked after final submission on the due date.)
The Turnitin Score should be less than 30% as at DRAFT date (Week 8) and the final Turnitin Score should be below 20% in your final submission.
Final due time and date is Friday 8.00pm 18 January 2019 (Week 9).
ONLY ONE soft copy (E.g. MS Word Document or pdf file) per group is to be uploaded to Turnitin on or before the due date and time. Updated reports may be submitted up until the due date and time however ALL copies MUST be submitted by the SAME GROUP MEMBER. This should be the person your group nominated as the Communications Director.
The Turnitin link will be open shortly before the final due date.
Students MUST accompany their submitted copy of the assignment submission with a completed and KOI Group Assignment Coversheet. Please note that marks will be awarded to all members of the group based on their input. The lecturer should be consulted if a group member is not contributing to the task WELL IN ADVANCE of the due date so action may be taken.
Only ONE person in EACH GROUP (the ‘group COMMUNICATIONS DIRECTOR) is to make the GROUP lodgement to Turnitin. Do NOT lodge multiple copies of the GROUP assignment from each group member.
Video presentation (1/3 of assignment mark):
• Video presentations must be submitted by 1 pm Tuesday of Weeks 10. The video must be 7 minutes in duration and ALL group members must participate with either or both recorded images or voice-over parts. The video presentation will give all groups the ability to further demonstrate their understanding of the entities and the work you have done in researching these entities.
• These marks will be awarded by the tutor/assessor based on the criteria given in the rubric.
• Groups may use any application to produce the Video however it must be capable of being uploaded to a YouTube Channel (which will be established for the purpose). The link will be given in Moodle at the end of Week 8.
• Groups should NOT simply record themselves reading material. It is expected that multiple media sources are used and MUST be fully referenced. Please note Copyright provisions require full acknowledgement of all sources.
After the videos have been marked, the markers and assessors may interview, students on various aspects of both the video and report content. These questions may include but are not limited to research methods and sources, information within the report and knowledge gained about the organisation under review. All members should be able to demonstrate their contributions to the report and video at this time. Note that your Group Mark will be finalised AFTER the video AND the reports have been marked and taking into account your ability to demonstrate your understanding of the topic.
Information to help guide your efforts:
How to layout your report
To help you understand how to go about evaluating the Remuneration Report, I have posted an academic article by Clarkson, P., Lammerts Van Bueren, A. and Walker, J. (2006) Chief executive officer remuneration disclosure quality: corporate responses to an evolving disclosure environment Accounting and Finance, 46, pp. 771-796. Please note that you do NOT have to summarise this article (or even read all of it), however please see Table 5 on page 785 to and review the 10 items this study looked at to review the openness of the reporting of the company.
YOU MAY FIND IT VERY USEFUL TO MAKE A TABLE USING THESE 1O POINTS AS A STARTING POINT TO REVIEW YOUR COMPANY’S REMUNERATION REPORT!
Headings and layout questions often arise and for this report, it is suggested the following headings would make the work more readable:
Executive summary – This is a ONE PAGE review of ALL the report. This should be a stand-alone document which could be read by the CEO (for example) to find out what the report was about AND what was found in conclusion.
Introduction – This is an introduction TO THE REPORT NOT an introduction to the specific company being studied. It introduces WHY the report exists, what it is examining (see the topic and tasks notes above for guidance) and how it is laid out. (Include a short summary of the aims and scope of the report in this section.)
Review of Topic and review of Literature
NOTE – THIS SECTION WILL REPRESENT UP TO 22% OF YOUR TOTAL MARK!!!
Present a summary of the literature researched on the topic of executive performance evaluation and remuneration in public companies. Creating this section allows your group to develop your knowledge on the topic to enable a better-informed consideration of the individual company’s remuneration reports. Include a discussion on the effectiveness of control systems within companies focussing on management/executive performance and reward systems.
Company review and analysis (20% of the assignment mark) – This includes the investigative report on the assigned company – answering the questions about the remuneration report as required in the task requirements above.
Each group should decide which aspects of the Remuneration Policy they have matched to their research. This provides the group with the opportunity to related the academic articles and material to the policy of their company and it should also help organise the report in a professional and readable format.
For example, you may wish to use the following sub-headings:
1. Details for remuneration committee and its membership.
2. Allocation of Executive Remuneration (Proportions rather than amounts of Fixed pay versus variable or ‘at-risk’ pay, sometimes paid as STIs and LTIs)
3. Mix of performance measures used
4. (This could be used to consider the use of or weightings of Financial Performance measures such as EPS/ROI/ROE versus non-financial measures such as balanced scorecards etc.)
5. Company performance (Total Shareholder Value) versus executive pay
(This could compare the change in company share price AND dividends or Earnings per Share versus executive pay – e.g. Company share price is going up and pay is coming down – or visa-versa?)
Comparison of remuneration methods used to the research content AND conclusion
(21% of assignment mark) – Ensure you consider how well the company’s approaches ‘worked’ in encouraging higher performance by the executive teams and consider if this translated to higher COMPANY PERFORMANCE. (Note it may be difficult to separate executive performance from overall company performance – say by considering the share price – as other market and industry factors may also influence share price.) This section should include a summary of your findings.
Conclusion: Here NO NEW IDEAS should be introduced. Only a conclusion of your findings and perhaps your group’s nomination of which company has the best remuneration system and what your group believes can be learned from the report and the method of remunerating manager’s in organisations. i.e. ‘Remind’ the reader, why you undertook the report (no – not because you HAD TO DO IT!) and the purpose of remuneration systems. It should LINK with the Introduction!
Bibliography – Full Harvard Anglia referencing should be undertaken for this report.
FREQUENTLY ASKED QUESTIONS (FAQs)
This section has been provided to assist and guide students in creating your report, the things that may be useful to include, more detail on how marks will be awarded and tips on working in groups.
How can you find all that data for your company?
Download and review the last 2 year’s annual reports from the relevant corporate websites and search “Remuneration Report”. Additionally, I would recommend reading the latest Chairman’s and CEO’s Reports to see what is being said about what is the most important management consideration going forward and READ the explanatory notes and summary in the downloaded report.
DO NOT START BY REQUOTING THE WORDING IN THE TASK SPECIFICATION ABOVE! THIS WORK MUST BE YOUR OWN WORK, IT IS A WORK OF DISCOVERY, AN INVESTIGATION AND A LEARNING EXERCISE!
Academic articles and how to use them
Several academic articles have been placed in the Assignment Folder on Moodle which you can refer to include more in-depth analysis. Please note that some of these have very lengthy sections on the methodology the writers used to test their hypotheses. It is NOT IMPORTANT that you read all that material. However, it IS IMPORTANT to read ABOUT what it was they were trying to test (called a hypothesis) and then their conclusions and summary at the end to see what they discovered.
Does anything in these articles match what you have found? If so, write about it and quote that article, if not, do NOT include that article. Alternatively, spend a few minutes researching using EBSCOHOST (NOT just Google or Wikipedia) and find articles that you can use.
Your report must include a summary of the academic journal articles you have found and your subsequent research findings and include a full bibliography in the Harvard Anglia style.
Industry and Companies will be allocated to each group during the
‘workshop/tutorials’ in ‘week 6’ held immediately after the Mid-Trimester Exam. Begin your research of the academic literature NOW searching EBSCOHOST and any other academic search engine (see the great resources made available through the KOI Library and website!) to find at least three to four articles for EACH group member. Start reading and reviewing this literature immediately so you will be better informed when you are allocated your company for review!
Referencing is required. Ensure that you fully reference ALL material that is directly copied and enclose direct quotations appropriately with full references. Also ensure you have referenced and cited all ideas, words or other intellectual property from other sources used in the completion of your assignment.
Please see the Library for assistance if you are unfamiliar with the correct procedure for Academic Referencing.
Please note that WIKIPEDIA is NOT an acceptable reference source other than for very superficial checking and should NOT be used as a primary resource as there are no controlled peer review of the content on this or similar ‘Wiki’ sites.
Working as a group:
Group size: Minimum of three (3) and a maximum five (5) students to a group.
Groups found to have less than five members may have additional students randomly assigned to that group to make up the maximum allowed.
After forming your group and submitting the Group Membership details to the lecturer in week 6, you should commence work immediately. The session immediately after the MidTrimester Test will be used for this purpose.
Project Group Conflict
For a project like this, success means being organised. The group will have to establish a division of labour and divide the work that needs to be done in a fair manner. Contributions to the project MUST be equitable.
All group members will need to meet for a number of hours each week. Agree on a regular time and place and set an agenda.
Group conflict is inevitable and should be resolved early in the semester. Group breakdowns are amongst the most common reasons why students fail. Make records (e.g. keeping emails sent and received) of all agreed meetings, who did and did not attend, agreed actions coming from the meeting and who is responsible for each of these.
When group conflict becomes destructive, group members should first consider using mediation to resolve any dispute, disagreement, grievance or complaint.
If the conflict still cannot be resolved, then group members can “fire” a member from the group by openly voting a person out BUT only after consulting the module lecturer.
Upon the approval by the lecturer, the group leader/representative must inform the ousted person the outcome agreed via email and copy the message to all other group members including the lecturer. The ousted person has the right to present a defence within five calendar days if he or she wishes to remain in the group.
In this situation, every group member must complete a Peer Group Evaluation to evaluate the contribution of every group member to the group project during the semester. All evaluations must be submitted in a sealed envelope directly to the Lecturer on the project due date. The results of the Peer Group Evaluation to assess group members’ relative contribution to the project task will affect the individual mark for the group project. A mark of zero will be awarded to any student who does not participate.
When a group member has been fired and decides not to challenge the decision, he/she will have to complete the whole project on his/her own (and not just merely submit the part that he/she was previously assigned to contribute). Likewise, the remaining group members will have to take over the work originally assigned to the ousted person and complete it.
Please note that in the event a project group breaks up and that the disintegrated groups do not finish the whole project on their own, the submission will be treated as partially done. The lecturer will not grade the project work on a partial basis (to compensate as a whole due to the breakup).
Alternatively, the ousted group member is free to join any other project group provided there is still room for an additional group member (maximum four to a group) and a unanimous decision is made by all project members to accept him or her.
Group members need to be familiar with all aspects of the project requirements. While the group may divide the project tasks up among members, the final document will need to flow smoothly.
Where to find information:
Remember, you are looking for additional academic articles and information to support your Report. You should try to find current articles written between 2010 and 2018. Earlier articles may be OK but you need to think as to whether they are still relevant given today’s circumstances.
1. Type the term into the Library database or EBSCO
2. Add a second search term such as “Shareholder Value” if you don’t get any results
3. Still no results that you can use? Try to use a different term that means the same thing.
Many articles you will find will be several pages long – this is quite normal for academic research papers as they are required to explain in detail the research methodology and results. These details are necessary to support and validate the findings.
Do not let this concern you, as, for the purposes of your research for this, and most other assessment tasks, you do not need to read the detail about the research methodology and results. What you need to find out is the purpose of the research: what question they are trying to answer; any context considerations; the findings – i.e. the answer to the question; and any comments about future directions or the application of the findings
To gain this information, points 1 and 2 will be found in the abstract and the introductory section(s) – usually within the first 2 pages. Points 3 and 4 will be found at the end of the paper under the headings “Findings” and/or “Conclusions” and/or “Recommendations” or similar. These are usually the last page or two pages.
Marking rubric ACC702 Assessment 3
Group research report and video presentation (Replicated from Subject Outline)
Criteria Fail (0 – 49%) Pass (50 – 64%) Credit (65 – 74%) Distinction (75 – 84%) High Distinction (85 – 100%)
Research – extent and application Value 22% Mark awarded Inaccurate, inappropriate or no use of literature. Analysis not developed. Few original explanations provided. Minimum number of sources, not all current or relevant.
Paraphrasing used throughout but not always accompanied by original explanations.
Theory relevant but not always linked to analysis. Sound selection of theory from a range of sources to build and adequately justifies analysis. Paraphrasing used throughout but accompanied by original explanations Insightful and appropriate selection of theory from a good range of current and relevant sources to systematically build and justify analysis. Minimal paraphrasing Integration and originality in the selection and handling of relevant theory to build and justify analysis.
Wide range of current and relevant sources integrated in a systematic way.
Analysis of the organisations Value 20% Mark awarded Poor evaluation.
Significant gaps in knowledge of the theory and lack of understanding of company’s capabilities.
No analysis provided.
Disjointed or no discussion. Simple discussion of areas of strength and weakness in the organisation’s capabilities. Work reflects limited engagement with organisational context or relevant theory. Most aspects of the task completed but assessment lacks cohesion. Identifies and discusses areas of strength and weakness in the organisation’s capabilities. Discussion of some relevant issues in theory and organisational content in evaluation providing some cohesion. Identifies and clearly explains areas of strength and weakness in the organisation’s capabilities. Links to organisational context and relevant theory in evaluation. All aspects of the task completed with minimal errors in cohesion Identifies and insightfully discusses areas of strength and weakness in the organisation’s capabilities. Strong links to organisational context and relevant theory in evaluation. All aspects of the task completed in a comprehensive and cohesive manner
Comparisons and conclusions Value
Mark awarded Few of the major comparative elements have been identified. Conclusions mostly lack cohesion with the theory. Some of the comparisons were not well linked to the results of the evaluation or relevant theory. Sound comparisons made,
linked to the evaluation results / may not be linked back systematically to relevant theory Displays elements of critical comparisons made, linked to the evaluation. Theory used
systematically in the comparison of the organisation’s capabilities In depth critical comparisons made. Theory used in insightful ways in application and discussion of the organisation’s
Report Presentation Value 4% Mark awarded Referencing mostly absent / not systematic / incorrect however some effort has been made. Acceptable presentation – but errors demonstrate lack of attention to detail. Some attempt at referencing Sound presentation overall but some errors.
Referencing is mainly accurate Displays elements of critical presentation Minor errors in some elements. Correct referencing throughout Excellent presentation – satisfies all elements.
Correct referencing throughout
Video Content Value 33% Mark awarded No references to academic literature or no linkages provided to practices in the reviewed case studies. Sufficient academic literature and linkages demonstrated between the theory presented and the reviewed case studies. A broad range of academic literature and linkages demonstrated between the theory presented and the reviewed case studies. Presentation displayed elements of critical review of both the academic literature and its application in the reviewed case studies. Excellent critical review of both the relevant literature and a thorough analysis of its application in the reviewed case studies.
Total mark out of 100
T318 Group assignment task specification: ACC702 PG – Managerial Accounting Page 9 of 9