Question

Consider the top-down and bottom-up approaches to controlling salary levels. Which one do you think would be more effective in a small entrepreneurial company? What about in a large government department? Why? What contextual factors would you need to consider?

Answer 1

Top down approach of controlling the salary level will be related to to controlling the salary levels of highly paid employees who are generally heading the organisation and all such board of directors and other people associated with the strategic level of the organisation whereas bottom up approach of controlling the salary level will be related to controlling the salary and reducing the salary of all those employees which are working at the lower level of the organisation and they are reduced with their salary in accordance with the bottom up approach..

I will always be advocating for top down approach of controlling salary levels in small entreprenual company because people in strategic level have higher salaries and even if their salaries are reduced after a certain limit they are not going to lose much whereas lower level employees will be having very lower amount of salary in comparison to the strategic level employees and they will suffer a lot if their salary is reduced.small entrepreneur company will also save higher amount of money if it is reducing the salary of upper level employees by top down approach.

In the government company, I will be trying to reduce the salary of lower level employees and medium level employees and introduce bottom up approach.

These approaches will be considered after the maximum advantage in case of savings which has been made out of these decisions of reducing salary and lower number of employees getting affected also.