1. Are CEOs being paid too much or are they worth the high compensation packages they receive? Compared to an average worker, the requirements and responsibilities of a CEO are much greater. For instance, most CEOs are required to hold a certain level of education and possess some years of experience in order to be considered for their position. However, based on the examples in “Chapter Two’s: Focus on Ethics”, I believe these CEOs are being compensated too much. Therefore, I propose that the shareholders of these companies reconsider the level in which their CEO’s salary and compensation packages are set. 2. Is it ethical or fair that a CEO receives a bonus when employees are being laid off or having their benefits reduced? Based on this specific instance, I believe it is enormously unfair to reduce the benefits and occupations of workers while a CEO receives a bonus. Since companies are required to maintain ethical standards, the rewarding of one employee should not result at the expense of another. Simultaneously, the violation of such moral standards could decrease the workers’ drive and the overall performance of the company while creating a vacancy in production and/or services. In addition to these possible side-effects, the company could also lose the social support and cultural support of their workers and customers. 3. …show more content…
Does high compensation for CEOs actually increase company performance? Due to the limited recipients of these compensations, I do not consider this to have a positive effect on the company’s performance. The concept of a few being reward while the majority receive nothing in return for their hard work has a negative correlation to the morale and performance of a company. If everyone is expected to perform their duties as a means of achieving success then everyone should have an opportunity to receive benefits from such
Frydman, C. (2009). Learning from the Past: Trends in Executive Compensation over the 20th Century. Cesifo Economic Studies, 55(3-4), 458-481.
James F. Lincoln believed in the “Golden Rule”- “Do unto others as you would like them to do unto you.” He managed the company with this rule in mind and today, the company’s management team still follows that rule which dictates how employees should be treated. This is the basis of the Lincoln Incentive Management Plan. Under this plan, employees are treated fairly and the company never laid off staff no matter what was going on in the economy or outside world. Lincoln believed that if incentives were given to staff, they would work harder for the success of the company. The company didn’t believe in sharing profits among shareholders but would share profits among their staff first. This plan has worked very well for the company throughout the years as they continue to be a top competitor in the welding
Are America's CEOs paid more than they deserve? Many people's answer is a vehement: Yes. That view is reinforced anew every spring, when companies file their financial statements and we learn how much CEOs were paid last year.
Imagine being in a world where people are paid in cash bonuses, stock options, or generous severance pay when fired from their job due to a company merger, are asked to leave, or choose to retire. This happens to be a reality for many CEO’s and top executives of companies. We live in an economy where mergers and take over’s have become common, and to allow this option for the highest paid employees of a company is arguably unfair. While researching golden parachutes, I formed questions due to the circumstances surrounding this executive option. For example, why should CEO’s, who live very comfortably, be given a compensation package for losing their position due to a company merger or retirement when employee and shareholder’s futures are at stake? Is it fair for the rich to get richer when numerous employees below top executives are dealt the same fate from a merger and shareholders’ investments are at risk but neither receive a form of additional compensation? Of course, there’re those who support the issuance of golden parachutes, arguing they can persuade a possible company merger to not take place due to the costs associated with a top executives golden parachute package. Another supporting point for golden parachutes is, they can make it easier for higher up executives, like CEO’s be absorbed into the future merged company. I will be addressing the point of whether CEO’s and other executives deserve to be awarded a Golden Parachute option by their company. As well as a brief background of Golden Parachutes and my stance on them. They’re a very important part of our growing economy and will always be considered in a merger/takeover if awarded to executives.
A salary is probably the most common compensation a CEO receives, and it is the simplest. Other common
Have you ever compared how much pro athletes make to how much a real job makes like a nurse or a teacher? Well the outcome is ridiculous. According to the 7th grade middle school Language Arts class of St.Pius X Catholic School, some people agree that Professional Athletes are paid too much. Furthermore athletes are paid too much because a normal job, as I said, make a fraction of what real jobs make like a doctor and doctors take real risks.
This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated.
Are elite athletes/sports men or women being paid too much if not how are there high salaries justified, if so, why, and how could there money be put to better use?
Additionally, the bonus money can be fairly divided between the two. Employees have the responsibility to follow and maintain business ethics and the code of ethics in the workplace. Employees have to be honest, communicate at all levels of the organization, deal with issues at the lowest possible level, and avoid conflict of interest that would lead to unethical decisions. Also, employees should be educated about the policies and regulations set by the company in order to maintain ethical practices in the workplace. Jacob and employees in general are bombarded by ethical issues and by abiding by their roles and responsibilities will guide them in making ethical decisions.
Trimming fat and reducing management layers is inevitable. However, boosting shareholder wealth by stepping on the stakeholders is immoral and unethical. While it is hard to say definitively what the right answer here was, we can examine some of Kidder’s principles of resolving ethical dilemmas to evaluate the decisions made. For example, ends-based thinking, which refers to doing what is best for the masses, was clearly not accounted for in this decision making process. Shareholders and senior management seemed to be the benefactors in CSC’s example. Furthermore, the care-based thinking principle also seems to have been neglected in this decision making process. I would find it difficult to imagine that senior leaders contemplated their proposed behaviors as if they were the object rather than the agent, and consulted their feelings before determining that 40% of the workforce must fall into the category of not meeting expectations (Hughes et al., 2014). Overall, CSC’s decisions were clearly not entirely moral or
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
Management spends a huge amount of time to design incentive systems and schemes to motivate their workers and to ensure they work in their best possible manner. Motivating workers by giving them decent pay helps in winning employees heart to make the work done efficiently, significantly and effectively. The most effective way to motivate people to work productively is through individual incentive compensation (Pfeffer, 1998). An attraction of getting more is a powerful incentive to people for high performance. While most people agree that money plays a major role in motivating people, in organizations there is a widespread belief that money may also have some undesirable effects on morale.
Employee compensation and reward systems have undergone a couple of paradigm shifts since inception. Reward systems were traditionally compensation based and focused on the individual or the position (Beam 1995). After a recession in the early 1980's, employers turned to performance based models in an attempt to save money while still rewarding top performers (Applebaum & Shapiro, 1992). Today, the most successful organizations are using a total reward model, a hybrid of the performance based model combined with strategic human resource management planning to create reward systems that both benefit the employee and help organizations realize their operational goals (Chen & Hsieh, 2006).
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
Attracting and retaining the most talented employees is essential for long-term organizational success. An important component to attracting and retaining such employees is the design and implementation of an effective compensation and benefit system. Assuming the role of a highly regarded human resource consultant hired to review, analyze, and revise the compensation and benefit system utilized by my city’s largest employer, Holland Enterprises, this paper presents a revised compensation and benefit strategy that suits the firm. This proposal describes how an effective compensation and benefit system could contribute to organizational effectiveness in the firm, the principle components of the revised compensation and benefit system for the