The disparity between the salaries of those working in managerial capacities and that of their subordinates should be within an acceptable range. This essay completely disagrees with this sentiment, as it would decentivise upward mobility and increase the turn-over rate amongst the people in senior roles.
Once the incentive of higher remuneration of reaching a superior position is removed, workers’ performance would detrimentally affected. This is due to the fact that if the wage does not accurately reflect once value or skill, then people would consider it unworthy of their effort. Consequently, this stagnance could potentially decelerate or even halt the progress of a company. To illustrate this argument, consider the common practice within many international companies, such as Twitter or Google, of rewarding excellence and contribution with stakes and shares, aiming to encourage the improvement of future work. Therefore, if there was a negligible difference between the earnings of workers and executive managers, no one would endeavor to advance their career.
In narrowing the compensation gap between people in senior management roles and others, the individuals in the former group would be more inclined to seek work elsewhere. The result of this high rate of replacement could be a devastating destabilzation of a company’s structure, as newly promoted managers would lack the experience to effectively lead. Thus, it would be advantagous for its competitor, as they could poach the talents through more attractive salaries. For instance, technology companies such as facebook and uber offers a substantial pay, giving them a competitive edge against other entities.
In conclusion, this essay completely disagrees with the notion of reducing the discrepancy in the compensation between levels in a coporation, owing to the fact that it would demoralize the workers and discourage loyalty in senior managers.