Integrity Matters
July 7, 2004
Top managers must earn high salaries
Question: (E-102)
Dear Jim:
How can top management earn 70 to 80 percent of a company's
total salaried pay while other employees and managers
who are working harder earn less? When a company is doing
poorly, it always seems to make layoffs lower on the
corporate ladder, while top management still earns the
same amount without any pay cut. Do these companies need
to focus more on top managers' performance rather than
on employees whom managers hired in the first place?
Response:
One of my mentors told me that bosses get paid for doing
nothing. However, they are often well compensated for
being responsible for everything. Allow me to explain.
The person in charge is responsible for making sure that
organizational objectives are achieved by overseeing
and sustaining excellent customer service, superior product
quality, career growth opportunities for employees and
maintaining a constructive and healthy work environment.
In almost every case, the employee is more capable of
getting the job done than the leader. So, the boss is
not doing the job, and in many cases probably cannot
do the job. Bosses who enable those about them to complete
their jobs effectively and efficiently would be classified
as successful, but only if they can show positive results
-- often in terms of profits. Still, effective leaders
also will have addressed other responsibilities as well.
As a consequence, the more respected leaders do earn
their incomes -- unless the financial rewards are simply
outlandish.
Successful leaders also are accountable for these nine
functions:
- Attract capital
- Foster competence
- Insist on character
- Clarify organizational purpose
- Refine communication
- Promote consistency
- Develop chemistry
- Leverage confidence
- Utilize compensation
When bosses provide the foundation for success -- with
and through others -- then they have earned the right
and privilege to lead and be appropriately compensated
as determined by their boards of directors.
Conversely, when employees conclude that their employer
is opting to capriciously hire, fire and lay off underlings
rather than making needed strategic moves or personal
sacrifices, then trust will erode and productivity will
suffer.
