EVA-based Bonus Systems and the Influence on Motivation of Employees in Companies with Branch- or Profit-Centre Structure

Table of Contents

1. INTRODUCTION

1.1 ABOUT DIS AG

1.2 RESEARCH AIMS AND OBJECTIVES

1.3 WHY IS THIS AN ISSUE FOR DIS AG?

2. LITERATURE REVIEW

2.1 MOTIVE, INCENTIVES AND MOTIVATION

2.1.1 MOTIVES

2.1.2 INCENTIVES

2.1.3 MOTIVATION

2.1.4 CONTENT AND PROCESS THEORY

2.1.5 INTRINSIC VERSUS EXTRINSIC MOTIVATION

2.1.6 MONEY AND MOTIVATION

2.1.7 WORKING MOTIVES

2.1.8 EMPLOYEE MOTIVATION, MODEL OF NITIN NOHRIA

2.2 PROFIT-CENTRES

2.2.1 FORMS OF CENTRE ORGANISATIONS

2.2.2 ACCOUNTING, CONTROLLING AND KEY FIGURES IN PROFIT-CENTRES

2.3 INCENTIVE SYSTEMS

2.3.1 INCENTIVE SYSTEMS IN PROFIT-CENTRES

2.3.2 PROBLEMS WITH INCENTIVE SYSTEMS

2.4 ECONOMIC VALUE ADDED (EVA)

2.4.1 POTENTIAL USES AND PROBLEMS WITHIN COMPANIES WITH PROFIT-CENTRE STRUCTURE

2.4.2 ADVANTAGES & DISADVANTAGES OF EVA

2.5 LITERATURE REVIEW - SUMMERY

3. AN PRACTICAL EXAMPLE - THE EVA SYSTEM AT DIS AG

3.1 WHY DID THE COMPANY CHOOSE EVA?

3.2 CALCULATION OF EVA AND PAYOUTS OF BONUSES

4. RESEARCH DESIGN AND METHODOLOGY

4.1 RESEARCH PHILOSOPHY

4.2 RESOURCES, ACCESS TO INFORMATION AND DATA COLLECTION

4.3 RESEARCH APPROACH AND TECHNIQUE

4.4 RESEARCH STRATEGY AND TIME HORIZONS

4.5 ANALYSIS OF DATA: QUANTITATIVE AND QUALITATIVE METHODS

4.6 ETHICS

5. THE EVALUATION OF THE EVA-BASED INCENTIVE SYSTEM OF DIS AG

5.1 QUESTIONNAIRE ANALYSIS

5.1.1 METHODS

5.2 FINDINGS

5.2.1 MOTIVATION

5.2.2 COOPERATION

5.2.3 TRANSPARENCY OF THE INCENTIVE SYSTEM

5.2.4 GENERAL STATISTICS

5.2.5 ANALYSIS OF SUGGESTIONS FOR IMPROVEMENTS AND COMMENTS

6. DATA INTERPRETATION AND DISCUSSION

6.1 MOTIVATION

6.2 COOPERATION

6.3 TRANSPARENCY

6.4 GENERAL COMMENTS

7. CONCLUSIONS

8. RECOMMENDATIONS

Research Goals and Themes

This thesis aims to evaluate the impact of Economic Value Added (EVA)-based incentive systems on employee motivation within organizations structured as branches or profit-centres, using DIS AG as a primary case study to identify potential improvements for organizational cooperation and transparency.

• Theoretical overview of employee motivation models, specifically incentive-based systems.
• Analysis of the profit-centre organizational structure and its inherent challenges.
• Examination of Economic Value Added (EVA) as a management and incentive tool.
• Empirical evaluation of the EVA system at DIS AG through employee surveys.
• Recommendations for optimizing incentive systems to balance competitiveness with cooperation.

Excerpt from the Book

Summary of Chapters

1. INTRODUCTION: Outlines the shareholder value approach and introduces DIS AG, a major HR consulting firm, as the case study for investigating EVA-based incentive systems in profit-centre structures.

2. LITERATURE REVIEW: Explores theoretical frameworks of motivation, including Maslow, Hertzberg, and Nohria, alongside the functional requirements and common pitfalls of profit-centre organizations and EVA systems.

3. AN PRACTICAL EXAMPLE - THE EVA SYSTEM AT DIS AG: Provides a concrete analysis of why DIS AG adopted the EVA system and how the company calculates bonuses and manages payouts.

4. RESEARCH DESIGN AND METHODOLOGY: Details the mixed-methods research approach, including the design and implementation of an employee survey aimed at assessing the impact of the EVA system.

5. THE EVALUATION OF THE EVA-BASED INCENTIVE SYSTEM OF DIS AG: Presents the primary findings from the survey data, focusing on motivation levels, inter-branch cooperation, and the perceived transparency of the system.

6. DATA INTERPRETATION AND DISCUSSION: Synthesizes the survey results, comparing them with existing motivational theories and discussing the implications of the current EVA system on corporate culture.

7. CONCLUSIONS: Summarizes the key insights, confirming that while the EVA system effectively drives performance, its lack of transparency and negative impact on cooperation present significant challenges.

8. RECOMMENDATIONS: Proposes actionable strategies for management to improve transparency, align objectives through MbO, and restructure branch cooperation to maximize employee satisfaction.

Keywords

Economic Value Added, EVA, Employee Motivation, Profit-centre, Incentive Systems, Performance Management, Branch Structure, Cooperation, Transparency, DIS AG, Human Resource Consulting, Bonus Systems, Organizational Structure, Employee Satisfaction, Management Control.

Frequently Asked Questions

What is the core focus of this thesis?

The thesis evaluates how EVA-based incentive systems influence employee motivation in companies that utilize a branch or profit-centre organizational structure.

What are the central thematic fields covered?

The study covers employee motivation theories, the mechanics and pitfalls of profit-centre organizational structures, and the specific application of EVA as a financial incentive tool.

What is the primary research goal?

The goal is to assess whether EVA-based incentives drive positive motivation and to determine how these systems can be adapted to improve inter-branch cooperation and organizational transparency.

What research methodology was employed?

The research followed a mixed-methods approach, utilizing both qualitative data and a quantitative survey conducted among 165 HR consultants and branch managers at DIS AG.

What key aspects are discussed in the main chapters?

The study provides a literature review, a deep dive into the practical application of EVA at DIS AG, a detailed analysis of survey results, and final recommendations for system improvement.

Which keywords define this work?

Key terms include Economic Value Added (EVA), Profit-centre, Employee Motivation, Incentive Systems, Organizational Transparency, and DIS AG.

How does the EVA model impact inter-branch cooperation according to the findings?

The study finds that the system's focus on individual profit-centre results often discourages cooperation, leading to internal competition and instances of lost business opportunities.

Why is transparency considered a critical issue in the study?

Findings indicate that a lack of clear information regarding bonus calculations and distribution, especially among consultants, leads to frustration and dissatisfaction, which negatively affects the motivational potential of the EVA system.