Macquarie Telecom Group Limited

Question: Discuss about the Macquarie Telecom Group Limited. Answer: Introduction: The overall report mainly evaluates the remuneration report of Telstra Corporation Limited, TPG Telecom Limited, Macquarie Telecom Group Limited, and INABOX Group Limited. In addition, key performance indicators of all four company is mainly evaluated, which in turn could help in analysing its performance. Moreover, detection and comparison are mainly conducted to understand the overall financial value of the company in comparison with its peers. Furthermore, the study portrays a brief background and objective of the company, which in turn could help in understanding their targeted approach. Relevant depiction about viability of the companys performance is effectively conducted. The report mainly evaluates telecommunication industry of Australia. Background material: Key performance could be measures with the help of three distinct methods, which are graphic rating scale, management by objectives and forced ranking. The management to detect their performance in comparison to previous fiscal year has used the above-depicted methods. Riaz et al. (2013) mentioned that use of effective performance indicators could mainly help the company in detecting the variation in their activities from previous fiscal year. Companies to evaluate their overall performance in the current fiscal year mainly use the following measures. Graphic rating scale: With the help of graphic rating scale, production oriented companies are able to measure their performance. In addition, this performance measure mainly evaluate fast pace production companies and allows the management to detect the mishap in the production system. Moreover, graphic rating scale mainly comprises of job duties, which is been conducted in the production function. These job duties are mainly evaluated on scales from 1 to 5, which could help in detecting performance of the employees. On the other hand, Windsor et al. (2015) criticises that performance indicator only detects the overall production measures, which is been conducted by the company, while ignores its sales. In addition, the graphic rating scale often fails to provide a detailed explanation of rating anyone with 1 or 3, which leads to ambiguity. The organisations often extend support to the staffs in accurate ratings by providing training or defining the concepts excellent or poor. The most common form of training for performance appraisals is referred to as the frame of reference training. Therefore, in graphic rating scales, the staffs are provided with concise and particular instances of performances and behaviours, which fit into each category. Therefore, with the help of graphic rating scale, the organisations could enjoy several benefits, since the system is user-friendly in nature and a rapid process. It has been observed that some organisations would often outsource the outcome to a third party to evaluate, while majority of the organisations compile the results internally. Therefore, graphic rating scale could be used to the performance appraisals of the individuals working in the global organisations. Management by objectives: This type of performance measurement tool is mainly conducted on employees, which hold supervisory or managerial position in the company. Moreover, this performance measurement tools mainly identifies employees goals and compares with the managers activities. In addition, the measurement mainly helps in detecting the timeline, which is needed to achieve the overall goals. Moreover, the performance indicators is mainly for the workforce, which is been depicted by the company on daily basis. This measurement mainly helps in evaluating the management and top officials of the company. In addition, by evaluating the performance of employee the overall success rate of top-level management could be detected (Riaz and Riaz 2016). Moreover, with the help of management by objectives, the organisations could be able to gauge actual performance and accomplishments against the set goals. The major benefits of management by objectives include enhancing the motivation and commitment of the employees. As a result, it helps in assuring better communication between the staffs and management. However, management by objectives lays stress on the goal setting procedures instead of objectives. In addition, the management by objectives does not ensure working on systematic plan. The management by objectives provides an overview to the employees in understanding their workplace responsibilities at the workplace. This is because the staffs are aware of their duties and the expectations of the organisation. As a result, it helps in improving the motivation of the employees, which would help in improving the organisational productivity. Therefore, the organisations would be able to maximise their final output, which would lead to effective internal management functions. Forced ranking: Forced ranking performance measurement is mainly used in a competitive organisational environment. In addition, this method mainly compares performance the employees with its peers, which in turn increases the overall competiveness among workforce. Riaz et al. (2015) stated that performance ranking mainly comprises of three levels, 20% of the top performers, 70% of the medium performers and 10% comprises with low performers. However, Piper (2016) criticises that forced ranking mainly increase the intense competiveness among employees, which could develop rivalry and hamper productivity of the workforce. This measure has been criticised, as the company favours some employee and ignores others based on performance. The forced ranking method would help in increasing the productivity of the workforce, as each employee is scared that he might obtain C ranking. Therefore, the employees would work harder to obtain a higher ranking for securing promotions, awards and incentives. Along with this, the forced ranking method helps in identifying the major players, which deserve professional development and attention. As a result, it would help the management of an organisation to find out the right person for the leadership position. Individual report: The company mainly aims in providing fixed cash remuneration to its executive, as depicted in its 2016 annual report. In addition, the management in form of cash or equity also pays short-term remuneration to its executives. Moreover, the company mainly focuses on the fixed remuneration, as it only accommodates base salary and superannuation. Furthermore, the increment in monetary benefits is mainly valuated based on performance of the company. Riaz, Ray and Ray (2015) mentioned that performance measurement mainly allows management to decide the overall remuneration, which is been entitled to the executives. With the help of figure 2, the overall performance measures, which is been conducted by Telstra to decide remuneration of its senior executive is effectively depicted. Moreover, the performance measures are mainly calculated by using FCF for STI, EBITDA, Total Income, Strategic Ney Promoter Score, and Individuals Performance. In addition, 75% of the remuneration is mainly paid in cash, while other 25% is paid in restricted shares, which are not freely traded in the market. Faghani, Monem and Ng (2015) stated that restricted shares are mainly used to control share price movement of the company, which could take a dive when directors are selling their share. The combination of short and long-term incentives is mainly conducted by the organisation to increase the overall performance of their executives. However, the company has strict regulations regarding restricted shares, which could be forfeited if the executive leaves the organisation within 2 two years. This disclosure is mainly p rovided in the glossary, which can be detected in the annual report. In addition, the remuneration is mainly calculated on the financial performance achieved by the company in comparison to previous fiscal year. TPG Telecom Limited: With the help of figure 3, the overall remuneration report of TPG telecom limited for the fiscal year 2016 can be effectively evaluated. In addition, the company mainly pays three type of remunerations, which are fixed and performance linked. These remunerations are furthered segregated to ensure adequate compensation is provided to the executive for their overall input in the company. In addition, TPG telecom limited has short term and long term incentives, which are provided on the basis of performance of the executives. In addition, the fixed remunerations mainly consist of basic salary, superannuation, non-monetary benefits to the executive. Furthermore, performance remuneration is mainly delivered on the basis of increment in the financial performance of the company. MacMillan (2012) mentioned that with adequate compensation method directors are able to motivate their executive to perform handsomely in the organisation. In this context, Layton, Smith and Stewart (2013) further s tated that performance remuneration could be reduced if increment in the overall profits is not detected. Moreover, the performance remuneration is mainly paid on the basis of vesting date, which detects duration of the executive in the organisation. The executive with high experience is the company is entitled to get 70% of the remuneration, while only 30% is allocated to the less experienced executives. However, short-term incentives are also provided by the organisation, which mainly comprises of cash incentives. In this context, Adams and Borsellino (2015) stated that cash incentives mainly help in motivating executives to increase the overall performance of the workforce, which might in turn improve their overall profitability for the fiscal year. Nevertheless, Duong and Evans (2015) criticises that during financial economic turmoil companies overall profitability declines, due to the low sales. Moreover, long and short-term remuneration is mainly calculated on the financial performance achieved by the company. Macquarie Telecom Group Limited: Figure 4 depicts the overall remuneration system, which is been used by Macquarie Telecom Group Limited in improving performance of its executives. In addition, as all the other companies Macquarie Telecom Group Limited, accommodates fixed, short term and long-term remuneration system. This remuneration has mainly helped in improving the overall performance of the company. Carnegie and OConnell (2014) mentioned that remunerations are also provided in the form of physical gifts and amenities as demanded by the senior managers of the company. Jackson (2013) argued that declining performance and reduction in growth of the company mainly increase chances of the senior executives to lose their amenities. The fixed remuneration of Macquarie Telecom Group Limited has been provided with salary, non-monetary benefits like amenities and cash bonuses. These measure of fixed remuneration mainly motivates the executive to provide 100% of their effort, which in turn increases performance of the wo rkforce. Macquarie Telecom Group Limited mainly aims in providing both short term and long-term incentives to the senior management, which are able to influence generation of investors to increase their exposure in the company. The overall increment in the performance of the company is mainly measured by the rising profitability, total assets, EBIDTA and share price. Company mainly calculates short-term incentives on the basis of KPIs covering both financial and non-financial measures of performance. Furthermore, as depicted in the annual report short-term incentive could be higher than 100% of the base incentive amount. In addition, long-term incentives are mainly provided in form of shares, which mainly motivates the senior manager to increase performance of the company. Cybinski and Windsor (2013) mentioned that with motivating techniques directors are able to increase efficiency of their workforce and raise implementation of innovate strategies. Furthermore, long and short-term remunerati on is mainly calculated by evaluating KPI both financial and non-financial. INABOX Group Limited: Figure 5 mainly states the remuneration report of INABOX group limited for 2016 fiscal year. In addition, the figure also states overall remuneration, which is being currently paid by the company to its relative executives. Furthermore, the company mainly follow the corporation act 2001 in depicting its overall remuneration to the executives. Moreover, with fixed remuneration, the company also pays short-term and long-term incentives based on the performance of the company. Thomas (2012) mentioned that Corporation Act 2001 mainly holds the base line, which is to be maintained by the company in providing benefits to its executives and directors. On the other hand, Westcott and Murray (2014) criticises that remuneration package mainly increases unethical measures in the company, as executives inflate financial report to attain more incentives. The fixed remuneration of INABOX group limited is revised every year by adjusting it with the consumer price index. In addition, the accommodation of the inflation rate and time value of money is essential in providing adequate remuneration to the employees. Moreover, the short-term incentives provided by the company are mainly derived from the performance of financial results, people management, and merger acquisition strategies. The long term incentivise are mainly provided based on deferred share payment, which is currently being discounted in 2016. Faghani, Monem and Ng (2015) mentioned that using adequate indicators to measure performance of the employee is essential to increase competiveness in the workforce. Nevertheless, Riaz and Riaz (2016) criticises that segregation, targeting of low performance employee could hamper the overall productivity, and the company could face high employee turnover. Moreover, INABOX group limited by providing incentivise and fixed remuneration i s able to sustain executives, who are responsible for the overall growth of the company. In addition, these remuneration packages mainly increase innovation of new strategies, which in turn raises profitability of the company. Comparison of the findings: After the evaluation of the remuneration of report all, the companies have effectively fixed a base salary and amenities for their executives. However, these amenities mainly comprises of gifts and things, which are been provided by the company directly to the employee. Moreover, fringe benefit tax is been paid by the company for delivering the non-financials remunerations, which is been paid annually. Riaz, Ray and Ray (2015) mentioned that with non-financial remunerations companies are able to provide benefits, which are accounted under fringe benefit tax. On the contrary, Piper (2016) argued that due to high taxation involved in fringe benefit tax, companies mainly restrict non-financial remuneration only to high-level executives. All the companies have been providing fringe benefit tax as non-financial remuneration is been provided to the executives. INABOX Group Limited mainly alters the fixed remuneration on yearly basis, to maintain competitive salary package to its executives . Short and long-term incentives: All the four companies have adopted incentive scheme as it motivates executives to innovative ideas, which might help in increasing productivity and profitability of the company. In addition, Telstra Corporation Limited and TPG Telecom Limited mainly use financial indicators like EBIDTA, profits and total asset to evaluate growth in performance. With the help of this method, both the company are able to measure the incentives, which are to be paid to its executives. Furthermore, INABOX Group Limited mainly uses financial, company management, people management and merger and acquisition strategies of the group to detect the performance conducted by the executives. The company is not only focused on financial performance, however, focus on the overall measures used by the executives to achieve targeted growth and expansion. Lastly, Macquarie Telecom Group Limited focus on both financial and non-financial KPIs to detect the overall remuneration, which could paid to the executives. MacMi llan (2012) cited that evaluating performance on the basis of KPIs is essential, as it depicts impact of the new plans, which are provided by the executives. Accommodation of Corporation Act: Corporation Act 2001 mainly states the relative information, which is needed to be depicted in a financial statement. In addition, the remuneration report also included in the act, which has been followed extensively by all the four companies. Moreover, the accommodation of the act is essential as it might nullify the overall financial report depicted by the company. In addition, the remuneration report depicted in the corporation act mainly depicts the evaluation of key financial indicators, which are used to detect incentives of the executives. Carnegie and OConnell (2014) mentioned that identification of relative key performance indicator is essential to detect effectiveness of the plans decided by executives. Accommodation of consumer price index: In addition, INABOX Group Limited mainly uses consumer price index, as it helps in increasing competiveness of the company. Furthermore, other companies do not use consumer price index in detecting the fixed remuneration it executives. In addition, INABOX Group Limited mainly uses consumer price index to change its remuneration to executives each year. The adoption of this method mainly allowed the company to increase pay to their executives, which is essential in improving their performance. Layton, Smith and Stewart (2013) mentioned that using consumer price index for determining costs is viable, as it depict adequate expenses, which might be incurred by the company. Conclusion: The overall assignment mainly evaluate the financial report of Telstra Corporation Limited, TPG Telecom Limited, Macquarie Telecom Group Limited, and INABOX Group Limited. This evaluation is mainly conducted on remuneration report used by the company to compensate its executives. From the evaluation, INABOX Group Limited could be identified as the most viable company, which has fixed remunerations and incentive schemes for its executives. In addition, the fixed remuneration system is effectively changed as per the consumer price index, which indicates the competitive remuneration package maintained by the company. Furthermore, incentive scheme is also adequate, as it not only evaluates financial performance but company management, people management and merger acquisition strategies used by the executives. INABOX Group Limited overall remuneration report depicts good foundation for long-term growth, which might improve performance of the company. However, the other three companys rem uneration report mainly depicts short-term schemes, which motivates the executives to perform for cash incentives. Thus, adoption of INABOX Group Limited remuneration scheme could help the other three companies in increasing long-term view of their executives. Reference: Adams, M.A. and Borsellino, G., 2015. The unspoken reality of diversity on boards.Governance Directions,67(2), p.78. Carnegie, G.D. and OConnell, B.T., 2014. 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