Executive Payment and Flexible Schedules at Work

Subject: Employee Management
Pages: 1
Words: 328
Reading time:
2 min
Study level: Master

In my opinion, the majority of strategies applied to providing executive payment are somewhat unfair due to the exceptionally fast-growing net worths of large companies. With thousands of low-wage factory workers (usually from developing countries), the ratio between the executive’s and average worker’s payment can result in hundreds of times (Gelles, 2018). The traditional «arm’s length bargaining» approach where a corporate board decides the executive pay is considered to be forcibly shaped by market rules. However, it has serious shortcomings due to managers’ decisions often being made «largely with shareholders’ interests at heart» (Bebchuk & Fried, 2004, p. 3), thus suggesting subliminal inequity. A more recent «pay-for-performance» strategy implies both executives and regular employees receive compensation according to the company’s performance during a given period. This method has also been criticized since it «could pressure companies to change their practices if they lag behind peers» (Ackerman & Lublin, 2015, para. 11), meaning the rise of deleterious rivalries on the market. Overall, the inequity between the executive and average payment appears to be a pressing but inevitable issue.

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I believe flexible work schedules to be an effective solution to the problems of pay inequity, lack of employees’ dedication, and counter-productivity. As has been mentioned by Schwartz (2017), the best way to ensure equal and fair payment is a «well-designed, individual compensation plan» (para. 17). The individual plan could consider both job difficulty and personal workload determined by employees themselves. Additionally, the ability of employees to manage their workload, I assume to be a gesture of trust and respect, which consequently results in better-established commitment between managers and average workers. From a psychological point of view, a system of flexible schedules is also an effective method of raising productivity since each worker is able to choose the most suitable hours according to their energy and daily activity. Given these points, I can identify the remarkable advantages of flexible schedules in terms of companies’ efficiency and the personal performance of employees.

References

Ackerman, A., & Lublin, J. S. (2015). SEC proposes disclosure rules on pay versus performance. Wall Street Journal. Web.

Bebchuk, L. A., & Fried, J. M. (2004). Pay without performance: The unfulfilled promise of executive compensation. Harvard University Press.

Gelles, D. (2018). Six C.E.O. pay packages that explain soaring executive compensation. The New York Times. Web.

Schwartz, J. (2017). Best practices for gender pay equity. Canadian HR Reporter. Web.