Page 63 - Appreciating Organization's Biggest Assets

the packages are like- wise. The • To study the difference between
industries which are highly bound executive compensation and
to follow government rules like freshers’ compensation and different
insurance, rail- roads pay relatively structures used.
low than those which are private. • To design an executive
It is common to see that senior compensation structure.
executives at HDFC are paid higher
than that of state bank of India. Scope of Work
Every industry sets its parameters This study is related to executive
for measuring the performance compensation in Indian IT firms
of its executive so that an efficient only.
compensation can be designed that
meets the needs of the Top manager, To narrow down the case study,
company and the shareholders. For five organizations were identified
the above parties to gain benefits, which are HCL, Wipro, Infosys,
there should be balance between the Tech Mahindra and TCS.
components of executive package. The data accumulated for the

There has been a debate from a study pertains to 2012 and 2022.
long time regarding the impact Although many factors are
of executive compensation on associated with organizational
organization performance. Many performance, we have restricted our
believe that paying huge amounts to scope to market capitalization and
executives is a waste of organizational pay disparity between lower and
resources whereas some argue higher positions.
that increasing compensation of Background
executives have a positive effect on
firm’s performance. According There is a unique difference
to agency theory, executive between a good organization and
compensation which is tied to a great one and it is decided by
performance can limit the agency who sits in the executive offices as
problems by aligning interests of without a leader, there is no way
managers and shareholders. ahead. Potential Executives can add
billions to their firms. Yet failure
Objective rates for senior executives are high.

• To study Indian IT organizations The CEO turn- over rate has been
and their organisational increasing lately as many companies
performance with respect to don’t follow best practices at every
executive compensation. step of the processes.

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