The effectiveness of a company is dependent upon the behaviour of the workforce. It is quite challenging to deal with the workforce's behaviour and motivation because it is dynamic and competition and the market is constantly changing. In order to manage the dynamics, create a workforce that works as a team, capitalise on the workforce's assets and skills, and to create a professional, enjoyable working environment, company's should provide appropriate incentives.
Reaching goals in this manner is a form of performance management as "performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc.," as reported by McNamara (1997-2006).
creation of shareholder wealth over time," reports Stewart (2006). TCS uses EVA as a tool to measure the value that has been created by the company within a certain amount of time. In other words, TCS's monetary value at the beginning of a time period is subtracted from the monetary value at the end of that period in order to come up with the EVA. The workforce's pay and bonuses were then based on this EVA. This created a close relationship between work performance and pay.
Most of TSA's workforce scope of EVA, only a few were able to benefit from Employee Stock Ownership Plans (ESOPs). Retirement Terminology (n.d.) states that an ESOP "gives employees the opportunity to invest in the potential growth of their employer. ...