Labor →
- 01 Dec 2008
- Lessons from the Classroom
How Many U.S. Jobs Are ‘Offshorable’?
Some 900 Harvard Business School students were asked to recreate a study assessing the potential "offshorability" of more than 800 occupations in the United States. Their findings: It might be a larger number than we thought. Key concepts include: Management students are likely tomorrow to face an unprecedented array of options concerning what they can do where. Increasingly, jobs are being viewed as groups of tasks that can be bundled, unbundled, and sent to different places. Offshoring could come to an end just as quickly as it began. Closed for comment; 0 Comments.
- 24 Sep 2008
- Working Paper Summaries
CEO and CFO Career Penalties to Missing Quarterly Analysts Forecasts
(Previous title: "CEO and CFO Career Consequences to Missing Quarterly Earnings Benchmarks.") This paper investigates whether the failure to meet quarterly earnings benchmarks such as the analysts' consensus forecast matters to CEO and CFO careers, after controlling for both operating and stock return performance and the magnitude of the earnings "surprise" revealed at the earnings announcement. In particular, it evaluates a comprehensive set of career consequences such as the impact on compensation, in the form of bonus and equity grants, and the dismissal of both the CEO and the CFO, conditioned on the failure to meet quarterly earnings benchmarks. Key concepts include: Missing analysts' consensus forecasts can potentially damage senior executives' careers. CEOs and CFOs also experience compensation penalties if their firms fail to meet the analysts' consensus forecast. Most of these career penalties for missing earnings benchmarks have increased in the post-Sarbanes-Oxley environment. Closed for comment; 0 Comments.
- 14 Apr 2008
- Research & Ideas
The Surprising Right Fit for Software Testing
Software analysts and programmers live to innovate—but hate to run tests. Yet top-notch testing saves many a company money when bugs are caught early. A case study describes the secret behind a Danish consultancy's success: The majority of its testers have Asperger syndrome or a form of autism spectrum disorder. Open for comment; 0 Comments.
- 01 Jun 2007
- What Do You Think?
How Should Pay Be Linked to Performance?
Online forum now CLOSED. Professor Jim Heskett sums up 98 reader responses from around the world. As he concludes, is there another subject as important as this one about which we assume so much and know so little? Closed for comment; 0 Comments.
- 01 Dec 2006
- What Do You Think?
How Important Is Quality of Labor? And How Is It Achieved?
A new book by Gregory Clark identifies "labor quality" as the major enticement for capital flows that lead to economic prosperity. By defining labor quality in terms of discipline and attitudes toward work, this argument minimizes the long-term threat of outsourcing to developed economies. By understanding labor quality, can we better confront anxieties about outsourcing and immigration? Closed for comment; 0 Comments.
- 25 Oct 2006
- Op-Ed
Fixing Executive Options: The Veil of Ignorance
Who says you can't rewrite history? Dozens of companies have been caught in the practice of backdating options for top executives. But this is only part of the problem with C-level compensation packages, which often motivate top executives to act in their own best interests rather than those of shareholders. Professors Mihir Desai and Joshua Margolis turn to philosopher John Rawls for a solution: Reward the execs, but don't give them the details. Key concepts include: Too often executive incentive packages are not aligned with the best interests of shareholders. Why create long-term value if your bread is buttered by quarterly performance? Option compensation could be restructured to ensure that managers were aware of the value of their compensation without any knowledge of the details of their compensation—a concept inspired by philosopher John Rawls' work on distributive justice. These options may only be useful for CEOs, senior officers, and directors—not middle management. Closed for comment; 0 Comments.
- 13 Sep 2006
- Op-Ed
Rising CEO Pay: What Directors Should Do
Compensation committees are under pressure to keep CEO pay high, even as shareholders and the media agitate for moderation. The solution? Boards of directors need better competitive information and an ear to what shareholders are saying, says Jay Lorsch. Key concepts include: CEO compensation in the U.S. continues to soar—American CEOs make twice what their European counterparts earn. Shareholders want to moderate pay hikes for top execs, but board members often give more weight to internal organizational pressures. Boards must be more critical of consultant reports, listen to shareholders, and align CEO pay with what is earned by other top management in the company. Closed for comment; 0 Comments.
- 30 Aug 2006
- Op-Ed
The Compensation Game
Do CEOs deserve "star" compensation? The idea that CEO pay is driven by the invisible hand of market forces is a myth from which chief executives have long benefited, say Harvard professors Lucian Bebchuk and Rakesh Khurana. Key concepts include: It is wrong to use sports stars' salaries to justify high CEO compensation. When setting CEO pay, board members can be influenced by economic incentives that are reinforced by social and psychological factors. Directors must be given strong incentives to focus on shareholder interests. Closed for comment; 0 Comments.
- 03 Apr 2006
- What Do You Think?
Has Globalization Reached Its Peak?
A new book argues that globalization has led corporations to outsource too much of their work and, more important, their intellectual capital. What with the increasing fluidity of labor markets, is it all too much for global managers to handle? Closed for comment; 0 Comments.
- 01 Aug 2005
- What Do You Think?
Is There an “Efficient Market” in CEO Compensation?
There appears to be little or no relationship between the size of American CEO compensation awards and actual corporate performance. Will change come from the increased level of competition among global companies with significantly different approaches to the compensation of senior managers? Closed for comment; 0 Comments.
- 02 Dec 2002
- What Do You Think?
- 12 Oct 1999
- Research & Ideas
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- 7
Thinking Twice About Supply-Chain Layoffs
Cutting the wrong employees can be counterproductive for retailers, according to research from Zeynep Ton. One suggestion: Pay special attention to staff who handle mundane tasks such as stocking and labeling. Your customers do. Closed for comment; 0 Comments.