Do you find executive compensation mentioned to be excessive? Why or why not?
The compensation for the executive is comparatively high to that of the workers .This is because the executives pay system does not concur with the employee’s compensation level and, therefore, lowering level of motivation in the workers. In addition, the trend in executive compensation over the years according to many observers has not been effectively linked with long term performance of the organization, therefore, encouraging pay for performance on the executives. These ideal as prompted to retaining and motivating the top management without considering employees efforts and contribution to the organization. The gap between these two parties is huge and, therefore, the need for human resource professionals to create transparent reward system that accommodate for reasonable and fair treatment among each party in the organization.
For companies using a broad banded pay system, how does CEO pay fit into this system? Do you think the high salary can be justified when a company is using a broad banded system?
Broad banded system when adopted by an organization will be able to create and allow flexibility in executive’s compensation. The system also has the ability to provide employees with greater opportunity in moving laterally in their compensation levels. The system also allow for flattening of the hierarchy whereby salary grades are reduced to less bands that offer different salaries and jobs. The system therefore, can provide managers with the ability to develop their career management and work hard towards accomplishing and managing a developed work force that possess wider goals and skills.
In addition to effective use of broadband system the organization ability to justify salary management is effectively improved. This is because the efforts that each worker in the organization contribute towards the organisation increase his lateral movement through improvements in promotions, increase in carrier ladder and also through personal development that give each member in organisation ability to appreciate efforts in different compensation rewards in there jobs. Through the broad banded system compensation each member can be able to be noted and the efforts that made him to reach to that high salary accomplishment as individual contributor.
How can HR professional manage this issue, assuming their organization pays the CEO much higher than workers?
The human resource professionals in addressing different aspects in executive’s payment should offer a transparent contribution regarding how organization role and management performance is achieved. The differential factor in compensation between the executives and workers should also be taken into consideration. The human resource professionals should also consult with the board of directors in addressing issues pertaining the CEO’S high compensation and work on addressing a common ground whereby each party contributions are appreciated. Lastly, the organization can also adopt a rewarding system that is propelled towards solving issues that give the top management and subordinates appreciation of their work towards the organization.
Management and leadership (Ml) CEOS are overpaid, 2014.Retrieved from http://management.about.com/cs/generalmanagement/a/CEOsOverpaid.htm