peer response

timer Asked: Mar 9th, 2019
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Question Description

attached is the response instructions and posts. please respond substantively to other students posts using the required amount of resources to support claims. Remember that you may also ask questions to further extend the discussions. Also, the instructor usually asks a follow up question, but he usually does it really late, so i will post up his follow up question on here as soon as I see his post.

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Peer Responses: Discussion 1 Instructions: After reviewing the Coleman (2016) article on executive compensation and reading this week's assigned readings, choose one of two statements below and construct an argument supporting your position: a. The market trend towards escalating executive compensation reflects the critical importance of an executive to an organization’s long-term viability. b. The growing compensation inequity between executive management and the average employee threatens to destabilize organizational morale and societal justice. Response Instruction: Respond to two of your peers’ posts using the reading material and 1 scholarly source to support your claims. Student 1: After reading this week’s assigned readings, I agree with the following argument: The growing compensation inequity between executive management and the average employee threatens to destabilize organizational morale and societal justice. I support this argument because it is difficult for line employees to see their merits recognized when the CEOs are the only individuals reaping the benefits. “Paying a lot of money for executive compensation creates income inequality within the company as well as externally. This can cause resentment and jealousy within the company and community, resulting in decreased employee motivation and performance and backlash or even sabotage against the company” (Weathington, 2016). While it is understood that CEOs have specialized or technical skills that only he or she can do. It also must be understood that the line employees carry out majority of the functions in support of the organization and without them the organization cannot succeed. The CEOs compensation package should be higher within reason. However, it should not continue to grow in size without also adjusting the compensation of the line employees. According to Jasson & Milgrom (2008), “Wealth and inequality awaken justice concerns. Substantial gaps between what people think is just and what they see around them generate judgments of injustice, setting in motion a train of negative consequences for individuals and society”. Justice concerns are sure to grow in size when an CEOs base salary accounts for twenty percent of their pay. The rest of their pay comes in the form of bonuses, incentives, and stocks. There are no set standards for a compensation package and how income should be distributed. We must remember the equity theory to keep feelings of injustice from rising. The equity theory suggests that “individuals examine the ratio of their inputs to outcomes to that of a referent other to determine whether they are being treated fairly or unfairly” (Locke, 2018). In keeping this theory in mind, organizations should be able to compensation fairly across the board between employees and the CEO. Student 2: The growing compensation inequity between executive management and the average employee threatens to destabilize organizational morale and societal justice. As we know, CEO’s are the top paid employee of a company. Due to high education, expertise, and strategic thinking, CEO’s are paid more than any employee. The responsibilities of a CEO is “creating, planning, implementing, and integrating the strategic direction of an organization. This includes responsibility for all components and departments of a business” (Balance careers, 2018). While reading the article “Executive compensation,” I have learned that CEO are not just paid based pay, but a substantial amount of incentives, “Only about 20 percent of a CEO’s pay is base salary; the rest is made up of incentives based on the company’s performance” (Coleman, 2018). Since the CEO has so many responsibilities and spends most of their time shaping and forming a successful company, incentives are expected. This may be concerning to many employees who work for the company because sometimes, in my perspective, employees are the face of the company and its our face they see when they walk through the door or speak with over the phone. Based on the employee’s production, builds the productivity of the company and the CEO receives the most benefit. After reading an article that states, “As leaders of an organization, CEOs are expected to not only act in the best interests of the organization but also to maintain high performance under stressful circumstances”(Palaiou, 2014), it makes sense why their pay is extreme. Discussion 2 Instructions: Today’s globally competitive business environment has caused many U.S. businesses to reduce the value of their employee benefit packages. Examine how an organization can maintain its costly benefit structure while remaining competitive against countries whose companies do not offer such benefits. Response Instruction: Respond to two of your peers’ posts using the reading material and 1 scholarly source to support your claims. Student 1: Many factors are involved in benefit structures, especially in a global-oriented business world. Every country has its own laws and regulations for compensation and benefits packages and in a global industry, it is important to understand the specific country’s compensation regulations an organization operates in. Europe has different compensation packages that are regulated by the European Union (EU). Most European countries offer universal healthcare and extended paid time off, whereas North America has employment laws with conflicting interests. Employment laws are signed to protect employees and organization but the importance of protection is based on the type of country - socialist or capitalist. To remain competitive in a global industry, companies have to consider the size of a company, which countries is does business in, and what type of workers it has. Organization need to consider the type of worker it employs: the expatriate is the employee who is working in a country in which he or she is not a native, the host-country national is the local employee working for a foreign country, and the third-country employee is a foreigner working for a foreign country (Weathington & Weathington, 2016). Each category employee is compensated differently based on currency, location, and responsibilities. “The base salary for a parent-country nationals and third-country nationals is linked to the salary structure of the relevant home country” (Watson & Singh, 2005). As our world becomes more globalized, a new industrial generation is created: the Fourth Industrial Revolution (4IR) that is changing how we conduct business around the world. The factors included in the 4IR are “entrepreneurial culture, companies embracing disruptive ideas, multistakeholder collaboration, critical thinking, meritocracy, and social trust” (Schwab, 2018). Organizations outsource globally to find the most financially beneficial region and are able to offer compensation and benefits strategies regulated by its own region while staying competitive with other nations. Student 2: Whether or not a company is operating on the global platform, the improvements in communications, technology, and travel have linked customers, suppliers, and competitors on an international scale (Weathington & Weathington, 2016). In order to maintain a substantial employee benefits package while remaining competitive within the global market, organizations or companies may need to look at readjusting their labor and operational costs. Companies can review areas such as salaries and wages to ensure they reflect the current market trends; realign the workforce to see what areas can be combined with other departments or even eliminated that section or division if there is no longer a need for that function. Additionally, companies can do more with less by cross training employees; or negotiate with employees to take a reduction in pay in exchange for working 10 hours, 4 days a week (Lewis, n.d.). This type of alternate work schedule can allow employees to spend more time with their families and take care of personal matters without having to take additional time off work. Moreover, by employees not being physically present at work, this can lower utility cost; minimize facility maintenance; and reduce the use of office supplies as well as servicing office equipment. These minor adjustments to the company cost can help to keep benefit packages and plans in place for employees. Moreover, companies need to manage their spending and work at cutting down overhead cost. For those organizations that deal with contracts, these agreements should be in place for no more than a year at a time. This will create competition and the possibility of the contract being negotiated to a lower cost (Odland, 2012). Other ways to reduce spending is manufacturing items in the U.S. verse abroad which can save on energy cost, increased freight charges, and inventory investment (Evans and Duff, 2014). Organizations can also use technology to their advantage by going paperless, which can reduce copier purchases or contracts along with purchasing paper and ink. Additionally, business travel can be limited by conducting teleconferences or meetings as well as online training requirements and/or professional development. ...
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Tutor Answer

School: Boston College


Discussion 1
Student 1
It is true that the growing compensation inequity between executive management and the average
employee is a threat to organizational moral and societal justice. Executive management solely reaping
the benefits of the joint efforts of other employees destabilizes trust and loyalty in the organization. The
high difference in payment between the executive and line employees increases income inequality both
internally and externally ( Salary Survey Guidebook: Finding and Evaluating Compensation and Benefits
Data, 1998). Income inequality demoralizes employees and reduces their motivation to work. In extreme
cases, they may sabotage the company. For the best results income should be distributed with reason in
that each increase is based on rational factors that affect all the employees in the organization. The logical
reasons associated with wealth and inequality in pay gaps is linked to justice and how fair the income is
distributed. Therefore, fair compensation is a mandatory consideration for any organization.
Student 2
It is true that Executive compensation is high due to higher education levels, experience, and skills.
Executives in an organizatio...

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Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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