Question

Discuss issues related to paying employees serving in the military and paying executives.

Answer 1

The main issues related to paying employees serving in the military and paying executives are as follows:

--There is high difference is in terms of equity theory. The executive pay has drawn public scrutiny because the top executive pay is much higher in comparison to average workers pay;

--Although the employees are performing their military service, however many are earning far less. To earn the public’s goodwill and demonstrate their commitment to these employees, several companies pay the difference between their military and civilian earnings, even though this policy is costly.

--Chief executive officers have an extreme impact on the performance of an organization, however critics complain that when performance falters, executive pay does not fall as fast as the organization’s profits or stock price.

-- Top executives mainly set the tone or culture of the company, and employees at all levels are affected by the behavior of the people at the top. Thus the opinion of employees’ related to the equity of executive pay can have a huge effect on the performance of the organization.

--As per the norms of Uniformed Services Employment and Reemployment Rights Act employers are required to make jobs available to any of their employees who leave to fulfill military duties for up to five years.

-- As top executive pay is much higher than average workers’ pay, consequently the executive pay has drawn public scrutiny.