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Microeconomics

1. Do you think exceptionally high pay to CEO's is economically justified? Why or Why not?.
2. A. Should a nation's income be distributed to its members according to their contributions to the members' needs? Should society attempt to equalize income or economic opportunities? Are the issues of equity and equality in the distribution of income synonymous? To what degree, if any, is income inequality.
B. Do you agree? Or disagree? Explain
3. Does your organization have wage and salary increase guidelines? If so, explain the guidelines, and indicate how closely they are followed. If your organization does not have wage and salary increase guidelines, set forth and explain your own guidelines that could aid your organization's management.
4. Explain in detail how your organization rewards employees for exceptional performance.
5. A Explain in detail how your organization rewards employees for exceptional performance. B. Do you agree with the argument? Why or why not?
6. Explain in detail how your organization rewards employees for exceptional performance Will they "look different" and "act different" in the future. Explain.

Solution Preview

The response addresses the queries posted in 1151 words with references.

//Prior to explaining the pay structure of CEO, we have to analyze concept of wage and salary. The explanation will help you t understand my view in the particular concern. This is an idea for you. You can change this as per your point of view. //

High Pay to CEOs

Exceptionally, high pay to CEOs is economically justified because of the various reasons related to the success of the organization in the competitive business environment. The main reason behind exceptionally high pay to CEOs is that CEOs act as the primary manager of all the activities in the organization. The strategic plans and decisions prepared and implemented by the CEOs have a great significance for the organization as well as for the employees. Effective plans and decision making of CEOs assist an organization in increasing their productivity and simultaneously, the revenue for the organization and vice versa (McConnell & Brue, 2005).

The executive who have contributed in making an organization successful are placed at the position of CEO in big corporate houses. High payment to CEOs is economically beneficial in many ways, such as their performance assist an organization in increasing the productivity and revenue, the executives who want to attain their position gets motivated which improves their productivity and performance, etc. High payments act as incentives for those who want to attain the top position in the organization and they focus on providing increased productivity and risk taking (effective decision making) for the development of the organization.

High payment to CEOs is directly or indirectly related to the marginal productivity and revenue from their performance. An organization is basically owned by the shareholders but the performance of the organization is basically related to the performance of the CEOs, management and employees of the organization. Therefore, it is economically beneficial for an organization to pay high wages to the CEOs (Hennigan, 2005).

//After describing this we have to explain about the concept of equity and equality. Both the term is similar, but both have different significance in the economic development of a nation or an organization. //

Equity and Equality of Income

A nation's income has to be distributed among the members according to the market mechanism and the percentage of poverty. Income has to be ...

Solution Summary

The response addresses the queries posted in 1151 words with references.

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