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Discriminatory favors to top executives – A business norm

Often times, employees at influential positions in a company are rewarded high compensation package at diverging rates. Be it joining salary, severance allowance, those sitting at top ranks takes out bigger chunk from company’s profits or earnings.

Who is the boss?

On contrary, employees at lower ranks, let say middle management and lower management or even workers are given no extra compensation that is beyond the limits set in their employment contract or labor law. When it comes to paying for these staff, not only HR but also top management rigorously cite and follow terms and conditions stipulated in the contract.

Boss is always right!!

At one of the manufacturing company, I witnessed that final settlement payment of a departing Vice President was increase six times in contrary to what was mentioned in his employment contract or set by labor law. It was done simply because the said VP requested to do so. As this was approved by CEO and Board, therefore, there was no question on legality of the excess final settlement paid.

However, does this practice stands true on ethical grounds when others at lower ranks are not rewarded extra for their efforts while top executives’ lavish demands are met with no restriction at all.

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Argument

Company’s reputation

One argument that is often cited in the favor of discriminatory favors is those top executives hold key positions in organization and may harm company’s objectives or adversely affect reputation if left unsatisfied and disgruntled.

High risk high reward

Another common reason put forward is the concept of risk-reward trade off. Being a top executive officer, one has to accept higher risk as he / she is the one that will be criticized for his decisions and such positions are prone to rapid changeover compared to lower positions. Since they have to take higher risk they should be rewarded with higher salary package, remuneration, bonus and severance allowance etc.

Counter Arguments

Might is Right

Boss is always right is the corpora-tic translation of ‘Might is Right’.  In practical world, rich-men make rules for poor-men to follow. This culture of ‘rules are for poor to follow may create resentment in lower-management staff.

Where are your manners!!

Apparently manners & ethics are meant for subordinates. Having weak bargaining power, lower-management staff are not in a position to challenge status quo and cannot retaliate lest they fear losing employment.

Share your thoughts on this???

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