“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.
The matter of executives getting paid more than some employees is a difficult one. Increasing worker productivity is the goal of any company, because it allows the company to be more efficient. Although the decision making of high level executives is also important because they are the ones who keep the company efficient at all times. I tend to agree with the later more so than the former.
This theory, of linking high level executives to the lowest paid employee, is being tested in our market today. Whole Foods Market, a grocery store chain who only sells organic goods, is one of the first companies to try this. Managements salary is linked to the lowest level employee, although each employee (even higher level executives) get paid with benefits, such as stock and health insurance. The CEO of the company gets paid only one dollar, but is a major stock holder.
Whole Foods is ran efficiently because of the added incentives. If these incentives are not available then linking salaries should not be made available. Executives are made executives, not because they have worked for a long time, but because they are innovative and good decision makers. They are the ones to run the company. If they had a salary cap then they would not be efficient. In an attempt to increase worker productivity, we lose the productivity of one of the best employees, the executive.
A telephone company in Europe, Sunrise, was headed down hill, but the CEO of the company made drastic changes over the span of one weekend. Over the span of a few months, the company had become ten times more efficient and began its process of overtaking the market, and beating its biggest competitor, Orange mobile. If the CEO was linked to the lowest paid employee he would not have tried as hard to change the company and make it the market leader.
If there was a cap applied to the executive then, they would not care too much about what is happening with the company because they are paid so little in comparison with say the sack boy. While the sack boy gets to decide paper or plastic,(which is not really his decision at all)the executive has to decide how many crates of meat to order for the holidays.
If you could grade this is would be great. I actually think I did pretty good and gave myself a 5, although this might be a little high.
