Global executives’ pay are higher than their employees and I believe that they should be compensated for them because running a company is not that easy whereas they just sit back and delegate and get all the benefits. In light of the Enron situation I could see why we would be against the executives having the highest pay than the employees. A lot of the money paid to these high officials comes from taxpayer dollars and the Americans are not happy with it. I can’t say that I am for their big pay 100%, but they do have all of these different perks that they receive and we as employees do not know about or we are not entitled to the same incentives that they are given. There is a lot of work that they have to do in order to keep the company …show more content…
If the organization profits, then the executives compensation will be better. The CEO/executives should be paid more because they have to attract, retain talented and competent people and make sure their goals are always met. They have to make sure the employees are motivated for better performance and this all starts from the top concerning motivation. If the top level management is not motivated, then the employees may feel that the company is not worth their time and go someplace else. A well planned and implemented, vital form of employee compensation can be an effective motivator and contributor to employee performance and job satisfaction which would ultimately benefit the company. It is reasonable, considering that it just makes sense that paying an executive more for better performance is motivational to the executives (Ferracone, 2010). The executives have to maintain a very prestigious lifestyle that fits his status quo and job and this takes more money than what his/her employees make. The CEO/executives has the final duty of all decisions made for the company and have the responsibility towards the company’s reputation and performance. The executives’ pay consist of four elements and they are salary and allowance, bonus, long term incentives and benefits …show more content…
This may include profit sharing, IRAs and bonus deferrals. Benefits and perquisites are health and life insurance and pension plans. This may also include if they are fired from a company a large severance package that may pay cash and stock options to them. Some of the features of executive compensation are that they are denied the privilege of having unionized strength whereas the regular employees can have this and the compensation cannot be compared to the wage and salary schemes meant for other employees in the organization. Also, secrecy is maintained in respect of executive remuneration and executive pay is not supposed to be based on individual performance measure, but rather on unit or company performance. Executive skills are not transferrable from one company to another and that makes it reason enough for them not to move that often. A lot of executives are comfortable where they are because they would rather not leave to find greener pastures somewhere else and end up in a worse situation than the one they are already in. This is a crucial concept of aligning the executive pay with the company performance. Executive compensation has unnecessarily increased relative to the average American worker and this is often seen as adverse in the public eye and seems
...ith strong share price and some of them will get the organisation with the worst conditions of company performance. This is when the corporate governance bringing the right direction for organisation making best practice in deciding executive remuneration to sufficiently attract and motivate, eventhough to reach the satisfactory result there is a long way to go, involves time and efforts. The executives' remuneration at WH Smith especially for CEO is considered appropriate because it does not rely on agency theory alone but also considered the guidelines of the UK Corporate Government Code (2010) which is to attract, retain and motivate directors. To support this argument, “high pay itself is not evidence of inefficient contracts but may simply reflect the market for CEOs and the pay necessary to attract, retain, and motivate talented individuals.” (Conyon, M. 2006)
Compensation is made of a base salary (paid by the hour, work or the year; excluding overtime or bonuses), variable pay (bonuses, profit sharing/stock options which work hand and hand with the performance of the company), and benefits (to include health insurance/savings plans – 401(k), or tuition reimbursement). The traditional way of determining base pay for jobs was to compare jobs in the same industry. Now industry and market, no long work by themselves, the current thinking is more person-based that considers knowledge, skills, and competencies of the work. This, however, is best suited for high-performing environments that remain flexible in their deployment of human capital.
CEO compensation has been a heated debate for many years recently, and it can be argued that they are either overpaid or that there payment is justified by the amount of work they do and their performance. To answer the question about whether CEO compensation is justified it must be looked at by the utilitarian viewpoint where the good of many outweighs the good of one. It is true that many CEO’s are paid an exorbitant amount of money; however, their payment is justified by the amount of money that they bring back to the company and the shareholders. There are many factors that impact the pay that the CEO receives according to Shah et.al CEO compensation relies on more than just the performance of the CEO, there are a number of factors that play a rule in the compensation of the CEO including the fellow people who help govern the corporation (Board of Directors, Audit Committee), the size of the company, and the performance that the CEO accomplishes (2009). In this paper the focus will be on the performace aspect of the CEO.
Power and Exploitation: Abuse by the Wealthy Are CEOs paid too much? Do the wealthy have unfair power? To put it bluntly, yes. CEOs make ridiculous amounts of money. So much, in fact, that many people have a hard time understanding how much they really have.
They only make a little more than average household income. The CEOs, athletes, celebrities that do make millions of dollars are those who worked for it and therefore it is completely justifiable. People need to quit blaming others for their downfall instead of arguing about the pay gap between CEO and workers they should strive to become a CEO. Anything is possible, and everything is reachable with the correct
In any business money is the driving force, whether it is the owner or employee. Money is the greatest incentive for performance amongst employees Lincoln Electric defined this fundamental reason for driving employees to excel at their jobs. Aside from compensation there is an understating between mangers and their subordinates that both have the same fear toward lack of income, this commonality serves to encourage all employees to deliver quality and affordable products at the best market
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.
Remuneration management is defined as the sum received for an employment or service delivered, this includes the money received on a monthly basis as well as benefits given as rewards (investopedia,para.1 ). Individualism need to be taken into account when implementing these remuneration structures or reward schemes, equal pay plays a role in balancing earnings among the diverse workforce (Shen, Chanda, D’Neetto and Monga,2009,p.241). The Woolworth’s Holdings uphold remuneration policies which have the purpose of making sure to attract and hold on to the best talent, that they are congruent with the strategies of the company and are the determinants of performance during the short and long phases. The policy considers the board members and the employees. This policy manages employees of the company by giving...
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).
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
There is considerable debate over merit pay and the effect it has on employees within an organization. Psychologists believe merit pay is related to the incentive theory of psychology; people respond to rewards and with the proper motivation, it increases performance (Cherry). Employers consider merit pay an effective tool and a form of competition strategy for motivating employees to achieve positive performance outcomes. Many employers ignore the fact that incentive plans may motivate some individuals while others have high work ethics and do not need motivation. The intent of this paper is to discuss merit pay used by companies, the motivational factors on employees to reach high achievement, and the challenges that employees face due
Formalized compensation goals serve as guidelines for managers to ensure that wage and benefit policies achieve their intended pur¬pose. The more common goals of compensation policy include to reward employees’ past performance, to remain competitive in the labor market, to maintain salary equity among employees, to motivate employees’ future performance, to maintain the budget, to attract new employees, and to reduce unnecessary turnover. It is important for the organ...
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.
Organizations are working hard in today’s world of business, not only to remain competitive, but also to focus on stability and structure. Employees are the backbone of an organization. It is becoming more important to offer quality HRM programs to staff, in order to support the retention of trained and experienced staff. Employees have always been concerned with salary however, there is a new focus emerging that looks at compensation as a whole entity. Monetary wages are now just as important as other benefits such as paid time off, medical and dental offerings and retirement. This paper will discuss the importance of the total compensation program which includes many aspects, not just salary. Attention must be paid to equal pay, pay
Employee benefits refer to any form of compensation provided by the organization other than wages or salaries that are paid for in whole or in part by the employer. Employee benefit has become a major component of employee compensation that can even determine whether an employee will take a particular job and remain in it or not (Amah, 2006). There has been a reduction in the benefits offered employees in recent times because of the hard economic times. This has not augured well with employees who always want more. Such benefits have a way of motivating employees to be more productive (Flynn, 1988). Organizations can only survive when employees are performing their duties as at when due.