INSIGHTS TO ECONOMIC INCENTIVES FOR UKRAINIAN TOP MANAGERS AS A DRIVER OF EFFECTIVE BUSINESS PERFORMANCE

Abstract

The article explores the dynamics of creating favorable environment for doing business in Ukraine as a key characteristic of business development. The study offers interpretations to the concepts of «incentive», «stimulation» and «economic incentive» along with presenting a salary survey of the highest paid top executives and the net profit of the largest domestic state-owned companies. One of the basic challenges for the national economy development is achieving high standards of living, in particular high income of citizens. Salary is a major source of income for hired personnel. However, for an employer, remuneration, as well as any type of material reward is a stimulating tool for staff to attain the company goals, on the one hand, and an element of production costs, on the other. Thus, building an optimal system of economic incentives accommodates the interests of all stakeholders in the labor process: employees, employers and the government as a whole. A top manager is one of the most critical elements of the company human capital, while personnel costs is a specific type of investment in the overall structure of the incentive system. The national legislation allows business owners not to disclose data on bonuses and salaries of their top managers. To date, the common practice of state-owned enterprises in paying bonuses to top executives is not to disclose the criteria of such remunerations which eventually might lead to a situation when heads of loss-making enterprises can receive bonuses.