Q1 In your opinion, which of the three (3) views best support the argument of a just wage?
Q2 Do you agree the author that CEOs in general are overpaid?. Why or why not?
Q3 Other than the measures suggested by the author, suggest other measures to narrow the gap between CEO and factory workers pay.
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6 comments:
SOALAN 1
In our opinion, we choose the utility views to support the argument of a just wage. The utility view conceives of wages as incentives for future work, not as rewards for past work. In this view, the purpose of wages is to maximize from wealth by attracting, retaining and motivating talented workers. In the case of the CEO, if that position is not compensated adequately, few talented candidates will apply or remain on the job for very long. Thus, a compensation package of $ 8 million is just if and only if it maximizes from wealth by attracting, retaining and optimally motivating a talented CEO. The utility view recommends rewarding successful CEO’s, it does not recommend paying them whatever they want. The wealth created by the CEO must be weighed against the cost of his services.
SOALAN 2
No, we are not agree because this is not fair for employees. Based on the case, Monarty argues that CEOs deserve to be paid but they do not deserve to be paid 30 times more than their employees. Moriarty believes CEO pay should decrease and that in order to do this companies should remove CEOs from the director election process, as well as require directors to make meaningful financial investments in the firms which they direct. The CEOs can get paid too much but based on their qualifications and skills. For example, in the TNBs cases is the timing also could not have come at a worse time, with the country now facing an economic downturn and uncertainties after the recent price hikes of petrol and household goods. Questions are also looming over the fate of other 28,000 long serving TNB staff, who are said to be subject to limited pay increase.
soalan 3
Dalam kajian kes ini, Mariarty memberi cadangan bagi mengurangkan jurang bayaran gaji di antara gaji pekerja dengan CEO, firma patut mengurangkan bayaran upah kepada CEO mengikut faktor pekerjaan mereka seperti bakat dan prestasi kerja dan melihat tanggungjawab CEO sebagai pengarah dalam sesebuah firma melalui piawaian gaji yang telah ditetapkan oleh firma tanpa berlakunya berat sebelah terhadap penggajian di antara pekerja dengan CEO itu sendiri.
CEO juga tidak digalakkan membuat pelaburan dari segi kewangan dalam firma tersebut kerana sekiranya CEO membuat pelaburan dalam firma tersebut ia akan membuat keputusan dan mementingkan keperibadian tanpa memikirkan keputusan daripada pelabur lain. Ini akan memberi risiko terhadap firma tersebut dan CEO akan mengambil kesempatan terhadap penggajiannya melebihi gaji yang telah ditetapkan oleh firma kerana CEO menganggap pelaburan kewangan kepada firma tersebut dapat memberi keuntungan yang lebih kepadanya dan CEO juga beranggapan bahawa tiada keselarasan gaji dan jurang antara mereka dengan pelabur lain dalam firma tersebut.
Firma juga perlu membuat carta organisasi yang sistematik dan tersusun bagi memastikan setiap fungsian mendapat gaji yang telah ditetapkan mengikut gred gaji mereka dan sebagai pengarah atau CEO tidak perlu melibatkan diri dalam pelaburan firma dan sistem pembayaran gaji sebagai seorang pengarah adalah satu pihak yang hanya diberi tanggungjawab untuk menguruskan firma tanpa perlu terlibat dalam pelaburan syarikat supaya tidak berlaku berat sebelah dalam pembayaran gaji terhadap CEO dan pekerja lain.
Dalam kes ini juga, cadangan yang boleh dilakukan oleh pihak firma adalah dengan menggunakan teori rule-utilitarianism iaitu setiap satu tindakan adalah betul jika ia selaras dengan satu set peraturan yang secara umumnya menghasilkan jumlah kenikmatan paling besar berbanding kesengsaraan untuk semua orang yang mana sebagai pengarah atau CEO syarikat perlu mendapat ganjaran yang setimpal dengan pekerjaan dan kepakaran yang disumbangkan kepada syarikat tersebut, begitu juga dengan pekerja bawahannya.
Question 1
In this case study, there are three views of justice in wages. The three views are agreement view, desert view and the utility view. In my opinion, I find that the best support the argument of a just wage is desert view. In the views of desert view, the people deserve certain wages performing certain jobs, whatever they might agree accept to performing them.
In this view, the wages people deserve may depend on facts about their jobs, people’s performances in them, or both. According to the desert view, the CEO should pay $8 million per year if and only if he deserves to be paying $8 million per year. CEO should get the wage he deserves, that the wage a CEO deserves is determine by his contribution to the firm, and that the proper measure of contribution is firm performance.
By assuming that the CEO had done their job perfectly and efficiency, they are deserve to be paying $8 million per year, because they have contribute their energy, their idea and their professional skill to the organization. This view is contrast with utilitarianism. Utilitarianism begins with the conviction that we should decide what to do by considering the consequence of our action. In the view of utilitarian, if CEO get pay more, they may consequent the declining profitability of the organization. As a consequence, the organization may not gain the profit maximization.
In this case, the best support ethics theory is the Rawlsian Justice. According Rawls theory of justice consists of two major components, they are: a method for determining the principles of justice that should govern society, and the specific principles that are derived from the method. CEO is deserves to get pay more because of the principle of justice, as we know, the job scope of the CEO are more burdens if compare with other worker because they may have to spend more time, more knowledge, more skill to their job. Therefore from the perspectives of the principles of justice’s view, they are worth to get more pay.
Truly, if we have the perspective from director or top management, CEO may deserve to get high pay. But if from the perspective of the factory workers, they might think that CEO is not deserves to get 301 times as much as the salary of the factory workers. In this discussion, I will have the perspective from the director or top management views, therefore I find that, the CEO are deserves to get $8 million per year.
Question 2
I agree with the author that CEOs in general overpaid. In 2003, CEOs of the 365 largest U.S. corporations were paid on average $ 8 million, 301 times as much as factory workers. Difference between CEOs’ salary and workers’ salary are quite far. This will cause workers’ unsatisfied with their job.
Actually, I agree with the author is base on several factors, that is the physical effort exerted by the workers, his contribution to the firm, the amount of ability or skill, its difficulty, stress and its degree of responsibility or importance. Consider his contribution to the firm; I think that is impossible for CEO to contribute to the firm around 301 times as valuable as the employee’s. This is meaning that for every $ 1 in revenue the employee generates, the CEO must generate $ 301. This is quite difficult for CEO to achieve it. Therefore, CEO is not qualified to receive $ 8 million salary per year.
Consider physical effort, the job of the CEO is requires less physical effort than many others jobs in the firm. Normally, the CEO’s job is negotiating deals, processing information, decision making, meeting with subordinates and clients. These jobs are not requiring so much physical effort. Besides that, consider with degree of responsibility or importance, we can not assume that the degree of responsibility or importance of CEO is huge until no one can compare with him/her. Degree of responsibility or importance of workers is also not less than CEO. The CEOs’ decisions can affect the lives of thousands of people both inside and outside the firm. But it wills not either. The decision of lower-level workers can be equally important. Sometimes, the worker’s decision can bring more interest and contribution to the firm. This is because of they are consider or evaluate every alternative more detail.
Consider the ability or skill, its difficulty and stress. Although CEO has the ability or skill that are appreciate and may facing its difficulty and stress, but this does not mean that CEO is eligible to get high salary which is 301 times as much as factory worker. As an example, the job of scientist in the company’s research and development department, their ability is more skilled and professional. Difficulty and stress that they are facing is also higher than CEO, but their salary are not high as much as CEO. Besides that, not only the CEO’s job is stress, worker’s job also gets stress.
As a conclusion, consider all the factors as I mention it, there is not logic for CEO’s salary 301 times higher than a worker.
Question 3
In this case, suggested can do by the party firm is by using theory utilitarianism. Definition of Theory utilitarianism is begins with the conviction that we should decide what to do by considering the consequences of our action. Utilitarianism tells us that we that we should act in ways that produce better overall consequences than the alternatives we are considering.
CEO gets higher pay is because he has ability that other person there was no might be is his expertise, his responsibility, his skill and others. Caused stated CEO always increases his skill so gap emolument among CEO with worker will increasingly larger. To reduce the gap, firm can take for some action to solve it.
Firm must providing practical training for their workers it who has worked with stated firm in a particular period of time so the worker will get increase his knowledge or new skill. With skill was improved then they will have chance to hold the post that the higher in stated firm. So, with the high position in the firm then they also would be able to get higher pay. With this method will also reduce the the gap between CEO and factory workers pay.
Beside that, firm also must create a system of organization orderly at the same time also should survey all department in the organization are functions smoothly. With this method, then firm can know not only CEO supply his helps while another employee also have contributions design respectively. Hereby if firm want reward to worker then can distributed fairly and not only reward to CEO only. Currently, large firm majority just want to know the decision produce only. When exist decision good, then firm side will increase the salary of CEO only while the contribution from worker inferior will be ignored. Caused this factor, wage gap among CEO with employee will increasingly larger.
Firm also can distribute small part share to every employee, please do not only give to CEO only. For example it, when firm side want distribute 25% share to CEO so he will work seriously and hardly with the firm. With share distribution to CEO, is not better distribute to the whole worker in stated firm. Say the distributions are leaning to the office hold but this was better only distributed to a person only. With this method, not only get reduce the gap pay among CEO with worked even also can motivate all firm deep employee stated work seriously and hardly because when firm get highly profit then indirectly can cause them get more dividend in a particular period.
prepare by:
Jessie Tong Wai Ching
Lock Yin Hoong
Lim Xui Ching
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