It’s an indisputable fact that there has been an explosive increase in the diffe
ID: 392691 • Letter: I
Question
It’s an indisputable fact that there has been an explosive increase in the difference between the average U.S. worker’s income and those of senior executives. In 1980 the average CEO made 42 times the average blue-collar worker’s pay. In 1990 it was 85 times. In early 2000’s it had risen to 531 times. In 2008 it was still rising but the severe recession of 2009 reduced the difference and after has generated some serious questions about executive compensation but gap is back to enlarging since 2014. What are the implications of executive compensation for motivation of the general workforce in organizations? For Executives?
it's a critical thinking question , i need a professional answer , thank you .
Explanation / Answer
The implications of executive compensation always have a positive aspects for executives in case if it is in growing trajectory, an executive will always like to be paid more than an average worker for a simple reason is that our workforce structure always depicts that those who control workforce are always more important to the organization and they are paid more.
On the other hand the implication on the average worked can be on both negative as well as positive side. Some of the worker may think it as positive motivation and will always work in the direction to reach there on the other hand there will be workers who will have the comparison and feel that they are not being paid fairly. We all have studied the equity theory of motivation which tell us about the perception of people about their own input and output.
The average worker may consider that he/she is also working for same hours than he/she must be paid equally on the other hand some may think that they have to achieve the quality of work as done by top executive to reach to that level.
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