Organizations tend to align their employees’ pay packages to the strategic business goals and objectives. The remunerations and benefits must reflect on the company’s market strength. Interestingly, employees’ remunerations do not necessarily have to depend on the company’s performance over a given period (Greenhouse, 2005).
For example, when Asciano made a loss of $695, it went ahead to give the then CEO Mark Rowsthorn $1.3 million cash incentive (Stone, 2011). Again, an account manager in any firm will use his/her technical skills in ensuring that the firm achieves both its short and long-term objectives. Notably, in organizations, jobs have different worth.
Therefore, organizations must safeguard the status of other jobs even if they are running at a loss. In addition, jobs in any firm have different ranks, responsibilities and set targets. These factors act as a benchmark for employees’ remunerations. Employees’ performance and companies’ sizes are also key factors that will cause pay differences between two employees performing same roles.
In the case study, I concur with Stella that there are fewer talents in other sectors of employment that is even footballers are dropped from the team if they prove unproductive. However, I do not concur with her idea of contradicting entertainers and footballers pay. These two groups of people have unique skills and talents that are extremely rare to find in the society.
This reason makes them be in high demand hence more pay and rewards (Employee Remuneration and Benefits, n.d.). Consequently, the pay for people working in the firm must also vary.
On the other hand, the comparison of top CEOs and normal employees in terms of salary is quite ironical given the requirements and tasks that accompany this position. Companies have different strategies of attracting and retaining productive employees.
Response to Student’s posting
According to Employee Remuneration and Benefits (n.d.), remunerations based on performance mostly lead to employees’ disunity and even weakens workers unions. Although the student concurs with Percy Samuels that CEOs should not be paid like movie stars, to some extent, I am not in agreement with this position.
For instance, some CEOs have worked hard in ensuring that the companies they manage move from the expected downfall to prosperity. Moreover, some CEOs have effectively managed firms through the Global Economic Times. When some companies were merging in order to overcome this crisis, some CEOs opted to remain steadfast in management.
In my opinion, these groups of CEOs deserve to earn more money than any other group of employees. CEOs at Costco Wholesale are the real examples who should earn more money than other companies’ CEOs. The challenges, strategies, and objectives that the CEOs have undergone through reveal this unique character (Greenhouse, 2005).
Additionally, people are contributing back to the society in different ways. It can be directly or directly. According to Toolika (2010), the public mostly recognizes direct contributions to indirect contributions. Actually, CEOs are always offered contractual jobs, and a company’s performance can be due to ineffective management by previous management team.
Evidently, Costco Wholesale operation styles prove this scenario of contributing to society. For example, they provide an attractive occupational, safety, and health insurance programs to its employees.
Again, Costco Wholesale pays its employees money more than its close competitor does, like Wal-Mart stores. It is also selling its products at relatively lower prices than the fellow competitor does. This group of CEOs should be accorded high remunerations and benefits.
References
Employee Remuneration and Benefits. (n.d.). Hunt & Hunt. Web.
Greenhouse, S. (2005). How Costco Became the Anti-Wal-Mart. New York Times. Web.
Stone, R. J. (2011). Human Resource Management (7th ed.). Brisbane: John Wiley.
Toolika, M. (2010). Employee Remuneration Components. Businessihub. Web.