CEO Compensation: Ethical Implications and Employee Stress Management

This essay examines the ethical considerations surrounding CEO compensation in comparison to other employees, evaluating the validity of current reward distribution systems and the impact of pay gaps on employee morale. It explores whether CEO and upper management salaries are subject to e...Read More

Unit 3
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Contents
Part 1....................................................................................................................................................3
Part 2....................................................................................................................................................5
References...........................................................................................................................................6
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Part 1
1. Is it ethical for CEOs to be paid so much more than other employees?
It is ethical to for CEO to be paid more than other employees as he is the owner of the public
corporations and owns 70% of shares and actively serve on to the board directors of the
company. It means that the owners of the public business are actively involved in monitoring
executive compensation (Ismail, 2014). If CEO is unhappy then they will sell out the shares and
all the burden will fall on the directors.
2. Does this practice use a valid reward distribution system?
Yes, this practice is valid for the reward distribution system as it increases the satisfaction of
employees. We can say that the effort and operation of employees are affected by the reward
system. Employees have external and internal motivation to do rewards and duties, which can
affect the employee's work and effort motivation.
3. Should companies be considering ways to reduce the gap to improve the overall
morale of their employees?
The company is trying to reduce the gap by motivating them for their work. It has found that the
money has become less important but most important is that to satisfy the basic needs. In
Maslow’s Hierarchy of needs, it has found that the personal growth, deeper purpose, and caring
relationship provide much more powerful motivation (Richardson, 2015).
4. Do you think CEO and upper management salaries are subject to ethical
consideration?
These all are more important for creating high performing organization and loyalty of the
employee than the financial compensation. It is ethical for CEO to be paid more than other
employees because they are the ones who are in the charge of the other employees. The vision of
CEO is much wider than the employees for the goals of the company. CEO gives the priority to
the company first.
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Part 2
1. Describe the factor or situation and think about how it can be reduced. Indicate if
the steps within the plan; will all steps be addressed by you alone or would help a
co-worker, management or your organization help you?
In today’s busy and challenging life stress is the main factor of health problems which can cause
the personal life and the work life of the individual. Workers who are under stress are poorly
motivated and less safe at the workplace. Stress can come from the pressure from the family and
can be at work. Management can protect their employees from stress which arise from the work
but cannot help for solving the stress which comes from the outside of the work (Sohail, 2015).
2. Consider the larger picture of stress management in the workplace. How important
is it that organizations help employees manage stress?
Work stress comes when the demand is high and the pressure doesn’t match with the knowledge
and the abilities. The best job is when the pressure on the employee is according to abilities and
resources to control the workload. An organization has the healthy environment, it is the one in
which the staff has made the health and the health promotion.
3. Is it incumbent upon an employer to help its personnel to deal with stressors that
may or may not be related to the workplace itself?
Work stress can be caused by the poor work organization, the design of work and the job. The
demands and pressure are made by the poor work design and unsatisfactory working conditions.
The effect of stress is that the person finds it difficult to maintain a balance between the work
and non-work life. Stress can bring unhealthy activities such as drinking, smoking. To reduce the
work stress is the proper design of the working environment, worker education, and training.
And the last is to develop the more responsive and sensitive management systems and enhance
the occupational health provisions. A good employee should manage and design the way of work
to avoid the risk factors for stress.
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References
1. Ismail, B.S., (2014). The relationship between CEO Pay and Firm Performance. IOSR
Journal of Economics and Finance
2. Richardson, W. F., (2015). Enhancing Strategies to Improve Workplace Performance.
3. Sohail, M., (2015). Stress and Health at the Workplace. Journal of Business Studies
Quarterly.
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