SOLUTION! Explain three benefits that control can provide in support of


Explain three benefits that control can provide in support of

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SOLUTION! Explain three benefits that control can provide in support of
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stronger organisation performance?

11.3 Organisational control systemsLEARNING OBJECTIVE 11.3 What control systems are used in organisations?Each component in an organisation’s control systems should contribute to maintaining predictably highlevels of performance. Internal control should be encouraged and supported; external control shouldbe appropriate and rigorous. The management process provides for a certain amount of control whenplanning, organising and leading are well done. Additional and comprehensive control is provided byappropriate systems such as those dealing with remuneration and benefits, employee discipline, financialinformation and operations management.Remuneration and benefitsBase remuneration plays an important role in attracting a highly qualified workforce to the organisation.If remuneration is attractive and competitive in the prevailing labour markets, it can make the organ-isation highly desirable as a place of employment. If employers get the right people into jobs, costs arereduced and productivity is boosted over the long term. Generally, more capable people exercise a higherlevel of self-control. When the wage and salary structure of an organisation is unattractive and uncom-petitive, however, it will be difficult to attract and retain highly competent workers. The less capable theworkforce, the greater the burden on external controls to ensure that desired levels of performance areachieved and maintained.The use of incentive remuneration systems also helps. When properly implemented, ‘pay-for-performance’, ‘performance-related pay’ and ‘merit pay’ plans serve as control systems. They can bestrong influences on individual and group behaviour. The logic typically used is quite straightforward,as described this way by a corporate executive: ‘Pay very poorly for poor performance; pay poorlyfor average performance; pay well for above-average performance; pay obscenely well for outstandingperformance.”However, the global financial crisis brought widespread cynicism about senior bankexecutives rewarding themselves with millions of dollars in bonuses while they brought the global finan-cial system to its knees. There is trenchant criticism in business publications of executives being paid

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