"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."


The issue of whether the salaries of corporate executives should be linked to those of their lowest-paid employees is a controversial one. On the one hand, high salaries are necessary to attact the best managers, the individuals whose decisions have the greatest impact on the overall well-being of the company. On the other hand, if the salaries of corporate executives are linked to those of their lowest-paid employees, the relations between management and workers will be improved, reducing costly labor disputes and increasing worker productivity. However, in the final analysis, I believe that the first point of view is more compelling and the contention that worker and executive salaries should not be linked.

One reason for my belief is that companies should compensate their employees based on their contributions. The more an employee can contribute to the company, the more he or she should be compensated. For example, most of the sales jobs are all commission-based. Some of the jobs offer sales persons some basic salaries and others even do not give any basic salaries. To the company, it is fair that the company will pay a certain percentage of the sales concluded by a sales person as the commission to him or her and it is an motivation to the sales person to work harder if their pay is based on the sales they can concluded. Another example: even for the very high position in the company, such as Chief Executive Officer, whose yearly pay is also based on the performance of the whole companies' profit and loss. The variable portion almost counts for more than 80% of the tatal payout for some cases. In the countary, if a company compensate its employees with regardless of their contributions, it is unfair to all the employees and it will demoralize them gradually.

Another reason for my belief is that the key factor for a company to success if whether it can employ the right perosn in the top management team, who is responsible for the crucial decision making. Just like the steersman in a ship, if the top management makes a wrong decision, the company will be in a big trouble. In these cases, the more hardworking the workers are, the more troubles the company will have. And the right person in the top management team is always value for money. Their compensation cannot be related to the workers.

The third reason for my belief is that pay should be corresponding to the employee's responsibilies. It is fair that the more responsibilities an employee take, the more he should be compensated. Normally executives take more responsibilities than workers do and surely their pay should be more than the workers'.

For both the reasons, I therefore believe that worker and executive salaries should not be linked. And companies should make it very clear to all the employees how their pay are related to their performance and contributions to the company.