Disparity in salaries of employees is a highly debated topic in many countries. While some believe certain employees earning much higher salaries than others is beneficial for a country, others, however, feel government should control salaries and limit the amount people can earn. In this write up I discuss both views and opine why I think paying higher salaries for certain performing individuals makes sense.
We live times where employees as well as companies are fighting to stay ahead of their respective competitions. On one hand, individuals are competing to outperform one another for better career prospects and on the other hand, companies are trying to hire the best resources to outgrow their rivals. In such a scenario, the invisible hand of the free market incentivizes companies to pay extravagant salaries to a select critical resource and at the same time the nation also benefits as tax collections increase.
However, we must take into account, that to pay super high salaries to certain employees, companies usually layoff individuals from lower hierarchies. This poses a problem to especially countries where a large number of workforce enters the market routinely. As jobs in the lower rungs dwindle, purchasing power of the population diminishes, which in turn creates a demand slump thus slowing growth of the economy. It is in this context some believe that a sealing should be put on the amount to be given as salaries.
I for one think that companies and individuals both are better placed when salary amounts match the performance of the employee. It keeps the workforce motivated to take more risks and work harder on their jobs. Also, putting a sealing on salaries would limit the options for employees to strive for better pay packages. At the same time, companies would fail to attract the right talent for the job.
In conclusion, I would say government interference in limiting or deciding pay packages would be detrimental to both companies and employees. Government should rather encourage companies to pass on the share of profits to its workforce for bringing a parity in salaries.
Disparity in
salaries
of
employees
is a
highly
debated topic in
many
countries. While
some
believe certain
employees
earning much higher
salaries
than others is beneficial for a country, others,
however
, feel
government
should control
salaries
and limit the amount
people
can earn. In this
write up
I discuss both views and opine why I
think
paying higher
salaries
for certain performing
individuals
makes
sense.
We
live
times where
employees
as well
as
companies
are fighting to stay ahead of their respective competitions. On one hand,
individuals
are competing to outperform one another for better career prospects and
on the other hand
,
companies
are trying to hire the best resources to outgrow their rivals. In such a scenario, the invisible hand of the free market incentivizes
companies
to
pay
extravagant
salaries
to a select critical resource and at the same time the nation
also
benefits as tax collections increase.
However
, we
must
take into account, that to
pay
super high
salaries
to certain
employees
,
companies
usually
layoff
individuals
from lower hierarchies. This poses a problem to
especially
countries where
a large number of
workforce enters the market
routinely
. As jobs in the lower rungs dwindle, purchasing power of the population diminishes, which in turn creates a demand slump
thus
slowing growth of the economy. It is in this context
some
believe that a sealing should
be put
on the amount to be
given
as salaries.
I for one
think
that
companies
and
individuals
both are better placed when
salary
amounts match the performance of the
employee
. It
keeps
the workforce motivated to take more
risks
and work harder on their jobs.
Also
, putting a sealing on
salaries
would limit the options for
employees
to strive for better
pay
packages. At the same time,
companies
would fail to attract the right talent for the job.
In conclusion
, I would say
government
interference in limiting or deciding
pay
packages would be detrimental to both
companies
and
employees
.
Government
should
rather
encourage
companies
to pass on the share of profits to its workforce for bringing a parity in
salaries
.