Question

John Mackey, CEO of Whole Foods, keeps his pay low to keep staff morale high and donates half of his pay to charity. Most of his pay is based on Whole Foods performance. Mackey has blogged that stratospheric CEO pay is bad for business. "Because of the yawning gap between the leaders and the led, employee morale is suffering, talented performers' loyalty is evaporating, and strategy and execution is 46 suffering at American companies," he wrote. Do you agree with Mackey's statement? Do you think more CEOs should follow his example? Explain. Validate your response with references from the textbook. To receive credit, click Create Thread to post your response to the questions above, and Reply to respond to at least two (2) classmate postings. See syllabus for discussion grading scale. (5 points) Module 9 Discussion O Starts Mar 30, 2018 12:00 AM

Answer 1

I do agree with the statement given by Mackey. If we try to understand the meaning of the statement given by him, we can conclude that although profit is like blood for the business organizations to survive in the competitive environment but there are a number of other objectives which are equally important of not less. The incentives for the greater efficiency and dynamic growth are facilitated by the profit and it helps in improving the living standard of customers by facilitating the goods and services but can it be done at the expense of morale of manpower.

As a leader of the organization, any CEO must be able to generate the feelings among the manpower that he is one of them rather than someone special. When there is a huge gap in the compensation between the CEO and the average worker, there can be some form of dissatisfaction among the workers as they also want a pay hike and to lead a good lifestyle. As the business world is trying it’s hard to attract talent, the skilled manpower is easily allured by the rivals if they offer the better compensation and it makes the organizations to suffer due to loss of the talented person.

The best solution in order to deal with such situation could be that the CEO also have similar compensation as the best employee in the organization. This will form a level of equality among the manpower.

I think whether all CEOs should follow this concept or not depends on the nature of the organization. If the organization is operating in a volatile environment having a lot so rival firms which are competing to attract the talent, this plan can be successful. But this is not a tailor-made or standardized solution to all the issues.