• Internal Code :
  • Subject Code : ACC702
  • University : Kings Own Institute
  • Subject Name : Managerial Accounting

Management Control Systems

Table of Contents

Abstract 

Remuneration Plan 

The alignment between the performance of CEO Bob Johnston and there wards and incentives that have been received by him 

Performance measurement measures which affected the ethical behaviour 

What are the different things that are reflected by the balanced Scorecard strategy? 

Criteria for Remuneration of GPT Group 

An evaluation of the financial and non-financial measures in achieving desirable outcomes 

Conclusion 

Reference List 

Appendices 

Abstract

The CEO and Managers are one of the biggest assets for any organisation as the company runs only for them. It is the CEO and Managers who perform the hard work to take the companies forward. For this reason, the CEO and Managers need to be treated well by the management that will help them to provide quality work. The structure of the remuneration needs to be better that will make the CEO and Managers interested to provide quality work for their business. There is a necessity to have proper measures of the performance that helps the organisation to motivate the CEO and Managers properly for which they need to implement different things that are important for the business. The assignment will consist of various activities that will help the organisation to perform well and also boost the morale of the CEO and Managers as well. The financial and non-financial measures of the organisation are also necessary to be identified so that more effort is provided to improve those measures for their own benefit. The GPT Group from Australia will be used in this assignment and the whole work will be done based on this company.

GPT Group

The company that is selected is the GPT Group. This is a real estate company that is situated in Australia. The organisation was founded in the year of 1971 and has their headquarters in Sydney, Australia. This is a public limited company and is traded under the Australian Stock Exchange by the name of GPT (Gpt.com.au, 2019). The full name of the company is General Property Trust. They are ranked as one of the best performing companies under the domain of real estate. The total portfolio that is present within the organisation currently is $ 24.8 billion. The work will be done based on the CEO and Managers present within the organisation.

Remuneration Plan

The remuneration report that is designed by GPT Group is designed in such a way that helps the organisation to support the shareholders’ interests and the interests of the executives so that they support the performance of the CEO.

The alignment between the performance of CEO Bob Johnston and there wards and incentives that have been received by him

The CEO of GPT Group is Bob Johnston. He joined the company as the CEO and the Managing Director in the year of 2015(Gpt.com.au, 2019). It is necessary for the management of the company to understand the performance of the CEO and Managers of the company so that it becomes easy for them to determine the structure of incentive that will be provided to the senior executives and the CEO. They are performing daily to earn more and more profits over the years. There is a committee for remuneration made by the management that consists of non-executive directors that help in framing the remuneration policies for the company. They are performing very well in the market, which led to the increase of the remuneration plan for the CEO and the Senior Executives.

Incentives Issued for CEO

There has been an increase in the incentive that has been issued for the CEO Bob Johnston. This can be observed that 50% of the measures for the corporate performance will be included in the incentive structure. The salary received by the CEO is AUS $ 3.9 million annually. There has been an increase of 3.8% in the remuneration as planned by the organisation. 

Remuneration to the CEO and Managers

The remuneration of the CEO and Managers has also increased in the GPT Group from the previous year. The reason backing this is that the market capitalisation have also increased for the company to AUS $ 11 billion. This has led to a change in the structure of remuneration for the company that is also supported by the management of the organisation.

Performance measurement measures which affected the ethical behaviour

There are various ways through which the performance of the organisation can be boosted. The measures for the management of the performance systems need to be performed well so that there is ethical behaviour within the culture of the organisation. The different types of measures that can be used by the organisation the GPT Group will be provided below:

The appraisal of the performance of the CEO and Managers needs to be implemented within the organisation in such a way that helps them to boosts the morale of the CEO and Managers. There should not be any kind of bias within the management and the CEO and Managers need to be treated equally. There cannot be any kind of discrimination among the CEO and Managers. This will help the CEO and Managers to perform well. This will also keep ethical behaviour and proper culture of the organisation. The culture of the organisation needs to be fixed and that cannot be destroyed at any point of time. Thus, these are essential for the management to use this system of performance measurement effectively.

The management of the organisation needs to run the organisation by fixing the objectives. The objectives need to be clear for all the CEO and Managers so that they can understand the objectives properly and perform the activities accordingly. It has been observed that if the objectives are clear to the CEO and Managers then they can perform well. Here also the management of the GPT Group cannot make any kind of bias decisions and all the CEO and Managers need to be treated in the same manner. This will help them to have ethical behaviour within the organisation and the cultures will be kept in the business.

Different programmes related to the development of the CEO and Managers need to be performed. This will help the CEO and Managers to perform better in the future and they will also get developed through those programmes. It has been observed that if the CEO and Managers get proper development they feel secured and they perform well for the organisation. There is a necessity for the management to treat all the CEO and Managers equally so that they do not feel unsecured. This will help the management to keep ethical practices in the organisation and the culture of the business will also be kept intact. This will help the organisation to move ahead without any kind of problems. These are essential for the business in order to perform better in the market they are in.

This is another important programme that is present in the organisation the GPT Group that has helped them to win over their CEO and Managers by keeping ethical behaviour within the business. These are essential for the entities to perform well in a proper manner. It has been observed that there is a necessity to bring in rewards and recognition for the efforts provided by the CEO and Managers. This helps the CEO and Managers to perform better for the organisation (Dahal, 2018). Thus, it can be said that by providing proper and ethical services for their CEO and Managers they can perform well for the company as well.

Thus, it can be stated that by following all the necessary activities without any kind of bias will help the organisation to keep ethics in the business and the cultures of the organisation are also kept intact.

What are the different things that are reflected by the balanced Scorecard strategy?

There are different measures of the performance that are necessary for the organisations to have greatest motivational impacts on the behaviour of the management. These are essential for them to perform the activities properly. It has been observed that the CEO and Managers need proper motivation so that their performance can be boosted in a proper way. These are essential for the business and the CEO and Managers as well. 

Criteria for Remuneration of GPT Group

The organisation manages all the information related to the remuneration for the CEO and the Managers. It is necessary for the organisation to plan strategies of rewards, incentive plans, and processes of the government and pay band. The CEO and the management are responsible to make the best remuneration for the employees so that they are completely satisfied. Proper HR strategies are necessary for the organisation to perform according to the rules mentioned by the Australian Stock Exchange. This provides proper information related to the remuneration. 

Different types of performance measures are discussed below:

Training to the CEO and Managers

This is one of the biggest measures of the performance that helps the CEO and Managers very well. The performance of the CEO and Managers is very much important for the business as based on their performances the organisation can perform well in the market. It has been observed that the better the CEO and Managers perform; the better will be for them to gain motivation from their work. These are very much important if the CEO and Managers can get motivation from their own work. These help them to perform better for the organisation, which boosts their morale as well. The management needs to check the CEO and Managers’ performances on a regular interval so that they can assess how they are performing and provide them with proper training that helps the CEO and Managers to improve their performance. It has been observed that if the CEO and Managers are provided with proper training then they feel that they are important and there is positive motivation within them that helps them to perform well. This measure of performance helps the CEO and Managers to get motivated and work in a proper manner.

Positive and effective feedback

The CEO and Managers need to receive positive feedback from the employers of the job they have done. These boost their morale and they get motivated to work much better. The CEO and Managers thrive for positive feedbacks and if they get the feedbacks they want, they can perform even better. These are vital for the business and the CEO and Managers themselves. These help them to provide quality work that helps the organisations to grow. It has been observed that if effective feedbacks are provided to the CEO and Managers, they tend to work on that even in a better way. These are essential for the business so that the performance changes a lot. This brings a lot of positivity within the organisation that is beneficial for the business as well. This is another way through which performance measures helps the organisation to motivate the CEO and Managers.

Rewards and Recognitions

The CEO and Managers need recognition from their employers for the good work they have done. They management of the organisation must provide rewards for the best works of the CEO and Managers so that they can get motivated. This improves the quality of work of the CEO and Managers that help the organisation to provide better results in the market (Pritchard et al., 2019). It has been observed that due to the implementation of rewards and recognition the performance of the CEO and Managers gets boosted as they are motivated. This also creates competition among the CEO and Managers as to who will perform better to get the best rewards. The management needs to work on this part so that the CEO and Managers get interested in the rewards that are sanctioned by them. These are essential parts of the organisation. Thus, it can be stated that if this performance measure is applied in the organisation then the CEO and Managers will get motivated and their behaviours will also change.

Talking to the CEO and Managers

It has been observed that the management of the organisations need to talk to the CEO and Managers to make them feel important for all the activities that they are doing. This makes the CEO and Managers think that they are important for the organisation. This thinking also brings in motivation for the CEO and Managers. This helps them to share all the information with the management that helps them to perform well (Kibichiiet al., 2016). This is very much important for the business as this boost the morale of the CEO and Managers and they perform even better that helps the organisation to grow as well. These are essential for the business to perform well. It has been observed that if the management talk to the CEO and Managers in regular intervals then they feel secured. This security also boosts their morale and they get motivated. This motivation helps the CEO and Managers to provide good behaviour that helps in getting proper work from them.

Advocate the career advancements

The management of the organisations need to provide knowledge as to how the CEO and Managers can improve their career. This brings in motivation for the CEO and Managers as they feel important in the organisation and think that they can get promotions for the higher positions. These help them to perform well for the organisation which helps them to perform well and take the organisation forward. This improves the performance of the CEO and Managers as well. These are essential for the organisations as they get good and quality work from the CEO and Managers (Mason K, 2017). Their performance boosts in the positive direction and there are no problems in the business as well. These are beneficial for both the parties and the performance gets boosted as well.

The points that are provided above are the performance measures that help the organisation to motivate the CEO and Managers and through these they perform well in the market that boosts their morale and perform well for the organisation. Thus, it is necessary for the management to provide all the things that are mentioned above in order to boost the performance of the CEO and Managers to get better results.

An evaluation of the financial and non-financial measures in achieving desirable outcomes

The financial and non-financial measures are very much important for the organisations to maintain. These are essential to check the performance of the CEO and Managers and the other aspects of the business to check where to make some changes so that the work is performed properly. It is necessary to maintain both the measures as they need to boost their performance always. These will provide proper outcomes for the company as well. There are certain activities necessary for the organisations like the GPT Group. The different types of measures will be provided below:

Non-financial Measures

These are such type of measures that check the non-financial activities. These are essential for the organisations like the GPT Group to perform. These include the performance of CEO and Managers, reputation of the companies and many more. The non-financial measures that are present in the organisation will be discussed beneath: 

Performance of the CEO and Managers

This is a very important measure to check the performance of the CEO and Managers working under the GPT Group. This will inform them the necessary activities that need to be done by them to improve the performance of the CEO and Managers. If needed, proper training must be provided to the CEO and Managers so that they perform well for the company as well. This is a very important non-financial measure that improves the finance for the business. So, it is necessary to give proper care for the employee performance.

Customer value and influence

This is another important part of the non-financial measures of the GPT Group. The values and influence of the customers are very much important for the organisation as these increases the base of the customers for the company (Queensland Government, 2017). These are essential for any company as the customers are the most essential parts of any organisation that brings in money for the company. There is a necessity for the business to keep the base of customer that they get. This can be done by giving proper service to the customers.

Competitiveness

This is another important thing that is necessary for the organisations like the GPT Group to observe. In the market of real estate, there is very high competition. The organisation needs to withstand the necessary activities properly so that they stay within the competition and provide quality work. This will allow the organisation to perform well in the market as well. These are essential for the business to boost their performance as well. 

Reputation of the company

The reputation of the company is a very important non-financial aspect that affects the financial measures. It is necessary for the companies like the GPT Group to maintain the reputation of the business. These are essential for the organisation to perform well (Atap.gov.au, 2019). The reputation can be kept by delivering quality work at the exact date that was promised. They should also provide good quality services to their customers as well.

Financial Measures

Along with the non-financial measures, there is a necessity to check the financial measures of the business as well. Since, finance is termed as the backbone of the company, proper care needs to be present for the same. It is necessary for the organisations to perform the activities in a proper manner that supports the financial aspects of the business. The financial measures will be explained below:

Key Performance Indicators

The statement of financial position is the best place from where these indicators can be increased. The identification of these indicators will help the organisations like the GPT to improve from the situation they are into (Gpt.com.au, 2019). These will help the business to boost as well. There has been a decrease in the current assets of the organisation from the year of 2018. This needs to be stopped as the current assets need to be increased. This is basically due to the increase in the expenses. Another aspect is that there is reduction in the inventories of the company from the year of 2018. This is a very good concern for the real estate companies as the more inventories they have in hand; the more will be their tension as to how they can sell their properties. Through this financial measure they can improve their financial position that will help them to boost their performance.

Ratio Analysis

This is another way through which the financial measures can be taken. Ratio analysis is very important for the organisations like the GPT Group to perform well so that the performance can be boosted. This is also calculated from the financial systems of the company (Gpt.com.au., 2019). These are essential for the company to check the analysis of the ratios properly. It can be observed from the financial statements that there is a decrease in the expenses on operating activities that has led to the increase in the operating income of the company. These are vital for the company as they are performing well.

Balanced Scorecard

This is another important aspect of the organisations like the GPT Group, where they need to make the exact balance that brings in the finance of the organisation. It has been observed that there are generally four perspectives to the balance scorecard (Ijbssnet.com, 2019). These are financial perspective, customer perspective, perspective of the internal business process and the growth and learning perspective. The GPT Group has better position in customer perspective and the perspective in the internal business process. These help the business to get more customers, which boosts their sales. On the other side, internal process of the GPT Group is very good that has helped them to perform the internal activities properly. These are beneficial for them as these perspectives are helping them to perform well in the market and boost the performance as well.

These can be stated from the financial and non-financial measures that business needs financial measures to keep the non-financial measures to perform well and on the other side, the non-financial measures need to be implemented well to increase the finance of the business. These have helped the organisation to perform well in the market.

Conclusion

The assignment provides a clear view of all the necessary activities that can be done to boost the morale of the CEO and Managers. These are also necessary for the CEO and Managers to perform better to provide better results for the business. It has been observed that there are various activities that are necessary for the business so that the performance can be improved by maintaining proper measures for the financial and non-financial activities of the organisation.

Reference List

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Appendices

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