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    Organizations and high salaries

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    Some organizations structure executive compensation so that executives can receive amounts ranging from hundreds of thousands of dollars to millions. Moreover, it's not uncommon for organizations to terminate or lay off large numbers of employees AND to give top executives big bonuses during the same year.

    1. Can organizations justify high salaries while firing or laying off large numbers of employees?
    2. What role does equity theory play in executive compensation and employees' perceptions of executives' pay?

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    Solution Preview

    This can be hard to justify for the common worker, however from a management view this is justifed if the layoffs and streamlining was in just cause. Many organizations are experincing economic trouble, due to the current state of the economy. Many senior managers are looking at areas that can be reduced to help the state of the business, such reductions can be in operations, maketing and etc. The overall use of bonuses have been in place for decades, however the bonuses seem to be more then enough. The "bonuses may be ...