Analysis on Employee Salaries Subject to Ethical Considerations on Hierarchy Basis

Abstract

In this paper we will be addressing my analysis on employee salaries subject to ethical considerations on hierarchy basis. And also I will answering the respective questionnaires as the assignment.

Analysis

Is it ethical for CEOs to be paid so much more than other employees?

I support that it is ethical and no doubt that CEOs can be paid more but however it is unethical for the difference to be as large as it results in employees becoming demotivated and some may be dissatisfied.

The performance of an organization is the result of the collectiveness of the employees as a whole, though CEOs are in charge of making critical strategic decisions, they can't be the only ones to benefit while the rest of employees do not reap relative rewards or awards. This wide difference may also result in damaging the relations between the managers and employees respectively. Because of the yawning gap between the leaders and the led, employee morale is suffering, talented performers’ loyalty is evaporating, and strategy and execution is suffering at not only in the American companies but also the global companies in every country.

It is clearly unethical for CEOs to receive huge salaries in this preforming organizations, a situation that is often commonplace in the developing countries especially the countries such as India, as I being an Indian can very clearly make a neutral observation.

Does this practice use a valid reward distribution system?

Since it is clearly observed in any market, an improvement in performance results in an increase in share price. Thus, when CEOs have a portion of their salaries tied to shares of the working company, it encourages them to work harder and improve company’s performance. However this system of measuring performance may not be effective since it can be open to manipulation.

The KPI's which are the key performance indicators of any individual plays a vital role.

Should companies be considering ways to reduce the gap to improve the overall moral of their employees?

Companies may reduce the gap by paying performance or the corporate bonuses, paying benefits such as transport allowance, housing allowance and monthly food coupon assistance to employees. The gap of allowances between upper management and employees should not be astronomical. Employees really do care about this issue, and a smaller gap makes for greater solidarity, and as a result better performance, throughout the workplace.