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Homework answers / question archive / Discussion Responses Discussion 1 Executive pay differs from that of the pay for hourly employees and even employees in salaried managerial positions

Discussion Responses Discussion 1 Executive pay differs from that of the pay for hourly employees and even employees in salaried managerial positions


Discussion Responses

Discussion 1

Executive pay differs from that of the pay for hourly employees and even employees in salaried managerial positions. “Executive pay arrangements typically consist of six distinct compensation components: salary, annual incentives, long-term incentives, benefits, perquisites and severance/change-in-control agreements” (SHRM, 2017). Executive pay is usually negotiable between the employee and the employer in the employment contract. Executive pay can be dependent on factors like the size of the organization, the complexity of the organization, and the how needed the set of skills the executive has in the marketplace. “Executive compensation packages emphasize long-term or deferred rewards over short-term rewards” (Martocchio, 2017). Non-executive pay is quite different. Non-executives may be responsible for some of the same duties that executives are responsible for but where an executive can be responsible for the entire company, a non-executive worker is only responsible for a department or a select region. Non-executive pay is typically non-negotiable and usually set within a standard salary range.

Executive compensation can be a controversial topic given that executives earn vastly more than non-executives. “In 2018, CEO pay was 361 times the pay of the average worker” (Hembree, 2018). Executives like CEOs of an organization are seen as being the leaders of the organization and thus must have more responsibilities than that of non-executive workers. As such they are provided with much higher salaries. While it is true that the CEO is responsible for the entire organization, non-executive workers add lots of value to the organization as they are the ones doing the day to day task that keep the organization running. Top executives within an organization often receive benefits that non-executive employees are not offered. Their jobs are often protected more than those of non-executive employees. All employees should be paid based on their knowledge, skills and abilities regardless of their rank or title within the organization.


Hembree, D. (2018). CEO Pay Skyrockets to 361 Times That of The Average Worker. Forbes.

Discussion 2

Good even everyone, the Bureau of Labor Statistics (BLS) reported that top executive is paid on average $107,680 per year (BLS, 2020). Employees placed into these roles are responsible for planning, directing, and coordinating activities from the highest organizational level to achieve company goals. Top executives include the chief executive officers (CEO), chief financial officer (CFO), and other senior members that lead an organization towards profits, and their pay is classified under the executive compensation. Executive compensation differs from non-executive because these members come from previous positions that earn higher wages than non-executive workers, so they are provided a customized employment contract. According to Heathfield (2019), “the contract spells out compensation, benefits, perquisites (perks), performance bonuses, separation and severance agreements, and other special terms of employment.” The combination of all those compensation factors is referred to as the Total Cash Compensation (TCC), and it is based on the knowledge, skills, and abilities of these executives. If the company succeeds and generates profits, it means larger payouts and rewards. According to the Center on Executive Compensation (n.d.), executive compensation consists of six components: “base salary, performance-based annual incentive (bonus), performance-based long term incentive, benefits, executive perquisites, and contingent payments.” Executives may have an attorney review their job offer to negotiate further details if necessary. In conclusion, non-executive employees are hardly given choices, options, or guarantees compared to executives because they are responsible for the company as a whole.


Center on Executive Compensation (n.d.). Basics of executive compensation. Retrieved from

Discussion 3

Contingent workers are those who do not have an implicit or explicit contract for on-going employment. Contingent workers fall under five groups of employees – part-time, temporary, on-call, leased employee arrangements, and independent contractors (Martocchio, 2017). The contingent workforce is a key component of the evolving changes of the work environment. Companies are using contingent workers in an effort to seek innovative ways to cut costs, increase efficiency, and perform competitively. The strategic use of contingent workers can be an effective tool in achieving the aforementioned goals (Murata, 2015). Compensation practices for contingent workers vary. Part-time employees work fewer than 35 hours a week. Companies that employ part-timers are their legal employers, but they do not offer discretionary benefits.

Part-timers are entitled to qualified retirement programs if they are at least 21 years of age and have worked over 1,000 hours within the last 12 months. Temporary employees are hired to temporarily fill in for core employees that are out on approved leave. Any compensation is directly from the company that hires them, and they do not work past one year. The hiring companies of on-call workers are responsible for managing and implementing Human Resources policies, including compensation. Leased companies are the legal employers regarding wage issues, benefits, and discretionary benefits. These employees are entitled to participation in the companies qualified retirement program. Independent contractors possess specialized skills that are in short supply in the labor market. Independent contracting is short-term, normally less than a year. Pay levels are not monitored and companies are not obligated to pay federal income tax withholding, over-time and minimum wage, insurance premiums, and retirement income (Martocchio, 2017).


Martocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.).

Discussion 4

It has become increasingly common for employers to use contingent workers. Organizations use temporary workers to backfill employees out on leaves of absence, projects and or initiatives, etc. Contingent workers are those who do not have an implicit or explicit contract for ongoing employment (Martocchio, 2017). Generally, a contingent worker does not work past a year. Through experience at my current employer, Dignity Health Medical Foundation, we hired two hundred (200) temporary employees to work in the COVID vaccine clinic. Temporary employees are an efficient and or cost-effective strategy to serve the needs of our local community by vaccinating them. This was more efficient than hiring regular full-time employees and then having to perform a layoff.

Temporary workers save the organization money by them not having to pay the temporary employee benefits. The temporary agency generally absorbs the cost of Workers’ Compensation and Unemployment Insurance. This is a great way for employers to observe the temporary employee’s work performance before offering regular full-time employment. The compensation for temporary employees varies in comparison to regular full-time employees. Organizations need to be mindful of the temporary agency's bill rate percentages. A good example is the employee’s hourly rate being $19.00 per hour and the bill rate percentage is 50%. This means the organization is paying the temporary agency $28.50. On-call employees are used as needed through the year and the compensation is managed by the agency (Martocchio, 2017).

Part-time employees do not work full-time hours and make less money. However, part-time schedules are good for employees looking for work-life balance and or a flexible work schedule. There are cost savings to employers because they offer few no discretionary benefits to part-time workers (Martocchio, 2017). The organization’s generally base benefit eligibility based on how many hours an employee works per pay period.

Leased employees are placed in a company. The leasing companies bill the client the direct costs of employing the workers (Martocchio, 2017). While Independent contractors are used and or contracted to do a specific job for a period of time. They are not employed by the organization.


Martocchio, J.J. (2017). Strategic compensation: A human resource management approach (9th ed.).

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