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elliebelly
- Newbie | Next Rank: 10 Posts
- Posts: 3
- Joined: Sun May 01, 2011 12:16 am
"Some have argued that the salaries of corporate executives should be linked to those of their lowest-paid employees. This, they argue, will improve relations between management and workers, reducing costly labor disputes and increasing worker productivity. What these people overlook, however, is that these high salaries are necessary to attract the best managers, the individuals whose decisions have the greatest impact on the overall well-being of the company."
Which do you find more compelling, the contention that worker and executive salaries should be linked, or the response to it? Support your position with reasons and examples from your own experience, observations, or reading.
It is true that linking the salaries of executives and lower level employees would build a strong public image, which could help reduce labour disputes. However, in practice it is likely to raise the overall costs of the company, and make it difficult to recruit the right people for the right roles.
Establishing and promoting a link between different salary levels is purely a 'band aid solution' to a far deeper problem. The recent outrage over bonuses to executives during the Global Financial Crisis has shown that the public perception of executive pay is important. However this outrage was primarily caused by an increase in unemployment, rather than a decrease in the salary of lowest paid employees.
In fact, formalising a link between different salary levels would likely increase the overall costs of corporations. This is because any increase in the salary of lowest paid employees could then lead the justification of similar increases at every level of the hierarchy, resulting in exponential increases in overall salaries paid. Introducing a rigid salary structure of this nature would ultimately be most harmful to the lowest paid employees, as it would deter management from increasing their salaries or taking on additional staff. In the long term, this is likely to only exacerbate the unemployment problems created by the financial crisis, and further damage the worker relations that this measure seeks to improve.
Therefore, while linking salaries provides a cosmetic solution to industrial relations issues it does not address the underlying need to create jobs and improve the base salaries of the lowest paid employees.
Which do you find more compelling, the contention that worker and executive salaries should be linked, or the response to it? Support your position with reasons and examples from your own experience, observations, or reading.
It is true that linking the salaries of executives and lower level employees would build a strong public image, which could help reduce labour disputes. However, in practice it is likely to raise the overall costs of the company, and make it difficult to recruit the right people for the right roles.
Establishing and promoting a link between different salary levels is purely a 'band aid solution' to a far deeper problem. The recent outrage over bonuses to executives during the Global Financial Crisis has shown that the public perception of executive pay is important. However this outrage was primarily caused by an increase in unemployment, rather than a decrease in the salary of lowest paid employees.
In fact, formalising a link between different salary levels would likely increase the overall costs of corporations. This is because any increase in the salary of lowest paid employees could then lead the justification of similar increases at every level of the hierarchy, resulting in exponential increases in overall salaries paid. Introducing a rigid salary structure of this nature would ultimately be most harmful to the lowest paid employees, as it would deter management from increasing their salaries or taking on additional staff. In the long term, this is likely to only exacerbate the unemployment problems created by the financial crisis, and further damage the worker relations that this measure seeks to improve.
Therefore, while linking salaries provides a cosmetic solution to industrial relations issues it does not address the underlying need to create jobs and improve the base salaries of the lowest paid employees.
