An understanding is drawn in order to understand motivational factor for employee in economic interest of employer.
- Examination of issues associated with salary and financial interest of employees.
- Examination of level of stress from perspective of employer.
- Critical evaluation of ethical practices adopted by upper management level for decision of salaries.
Organisational theory is defined as the way people or employees in an organisation interact with each other this hypothesis or concepts is applied within an enterprise with the objective to develop more efficient business. Organisation theory is also applicable to management of employees in a firm. Organisation behaviour is referred to as the interface between an individual and business performance. There are several types business model such as autocratic, supportive, custodial, and system hypothesis which can be applied in different situations.
The purpose of the report is to identify the way monetary incentives motivates employees to increase their participation in business activities.
Is it ethical for CEOs to be paid so much more than other employees?
it is ethical practices. As these people are given salaries on the basis of their responsibilities and roles they perform at workplace. Directors or other top level manager have higher responsibilities as compared to other workers in an organisation. These people also bear high risk by making investment in a company or business. Therefore, they are entitled to higher salaries (Effelsberg, Solga and Gurt, 2014)
Does this practice use a valid reward distribution system?
Human resource manager in an organisation can develop the incentive or reward system. As this strategy will assist management team in increasing the workers moral and motivating them to increase their contribution in driving a company towards success. As per the employment and wage act workers should be provided fair wages , salaries etc. Employees can demand salaries as per their nature of roles as well as responsibilities in an organisation (Braun, and. et. al., 2013)
Should companies be considering ways to reduce the gap to improve the overall moral of their employees?
Yes it is essential for management team in an enterprise to adopt the appropriate strategies or plans for minimising the gap. As this activity will assist management team in increasing the employees moral. It is essential for an management team in an organisation to adopt the appropriate tactics to reduce the salaries' gap, as this will help them in providing high level of satisfaction to employees.
Do you think CEO and upper management salaries are subject to ethical consideration?
No, it is not ethical consideration. As comparison should not be made on the basis of salaries rather it should be on the grounds of qualities, nature and type of work as responsibilities fulfilled by an individual. This subject matter has some relations with the ethical considerations. As according to the laws workers should be provided with fair wages or salaries. It is required by human resource team to make suitable policies and make fair payment to workers. As this strategy will assist business entity ion eliminating ethical issues (Alavosius and et. al., 2016)
It has been concluded from the report providing the higher salaries to employees working at top-level management is not at all unethical practices. As these people are getting salaries as per their skills, abilities, nature of work as well as responsibilities.
But it has been suggested to an organization, that management team in an enterprise should introduce a reward system. As this strategy will help human resource managers in increasing employee morale and encouraging them to work for the betterment of the company.