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Employees support high executive pay … in ethical companies
By Lauren | January 6, 2010
It’s that time of year again. Corporations are about to pay out big bonuses to their top management and the annual debate about the fairness of executive compensation will resume. This is a particularly hot topic this year, when so many people are either out of work or taking pay cuts in the wake of the recession. For companies that accepted TARP funds the issue is even more urgent because Kenneth Feinberg, the Administration’s special master for executive compensation, will have to decide whether massive executive bonuses are appropriate for those companies.
Do employees really think their bosses are worth as much as 275 times what the average worker makes in their companies? According to a recent Ethics Resource Center survey the answer is often yes, especially in companies with strong ethical cultures.
The Ethics Resource Center reports that, when employees believed their companies had a strong culture, fully 91% of those employees thought their bosses’ compensation was appropriate. By contrast, in companies whose employees thought their cultures were weak, only 20% thought their bosses deserved the money they made. In other words, employees judge their bosses in large part on their success in creating and sustaining strong ethics in the workplace.
There’s a lesson here for executives. You may think your job is to make money for your shareholders, but your employees think that you’re responsible for setting your company’s ethical standards. If you want your employees to respect you, show them your commitment to business ethics. If they respect you, they’ll want to emulate you. A stronger corporate culture will surely result.
To read the Ethics Resource Center’s survey results, go to http://www.ethics.org/page/ethicsstat.
Topics: Business Ethics, Lauren Recommends, business communications, corporate responsibility, customer relations, ethics |
January 7th, 2010 at 3:05 pm
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