ECONOMIC INCENTIVE TOOLS FOR TOP MANAGERS

Abstract

The article discusses the basic economic incentive tools for top managers along with offering their classification and revealing the nature of incentives for senior-level management. In modern realia, economic incentives apparently seem to be effective methods to motivate senior executives. It is argued that top managers are the most important elements in the company's human capital, their remuneration and creation of favorable environment is a specific type of investment within the overall structure of the company’s compensation and incentive plan. While designing an effective compensation strategy for personnel, it is critical to acknowledge that the effects from providing incentives for top managers are of higher value to the company’s performance than rewarding other employees. The performance appraisal framework to assess senior-level managers should include the criteria relating to the company’s overall performance as well as the indicators of their individual contributions, with a focus to attaining the company’s strategic goals. Given the above, it is suggested to classify economic incentive tools into monetary and non-monetary. The monetary incentives are additional financial bonuses that enhance the overall motivation policies for the company’s top managers. Non-monetary instruments contribute to boosting personal motivation in the work quality as well as the company economic security. Business owners, in turn, should make every effort to employ a range of economic incentives, in different combinations, scale and patterns to build an effective management system and unlock the capacity of senior executives.