Explain three benefits that control can provide in support of


Explain three benefits that control can provide in support of

stronger organisation performance?

11.3 Organisational control systems
LEARNING OBJECTIVE 11.3 What control systems are used in organisations?
Each component in an organisation’s control systems should contribute to maintaining predictably high
levels of performance. Internal control should be encouraged and supported; external control should
be appropriate and rigorous. The management process provides for a certain amount of control when
planning, organising and leading are well done. Additional and comprehensive control is provided by
appropriate systems such as those dealing with remuneration and benefits, employee discipline, financial
information and operations management.
Remuneration and benefits
Base 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 are
reduced and productivity is boosted over the long term. Generally, more capable people exercise a higher
level 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 the
workforce, the greater the burden on external controls to ensure that desired levels of performance are
achieved 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 be
strong 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 poorly
for average performance; pay well for above-average performance; pay obscenely well for outstanding
performance.quot;However, the global financial crisis brought widespread cynicism about senior bank
executives 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

Back To Top