Remuneration Issues In The Organization: CEO Compensation University Essay Example

The current economic crisis has brought numerous discrepancies in the way the world economies are run. Apart from exposing the weaknesses inherent in the systems issues of remuneration have hit the headlines hard. The financial institutions that triggered the credit crisis were the same firms offering some of the highest remuneration for their top executives. Indeed the ethical stands as well as morality issues concerning these remuneration levels elicit reasonable resentment among the general public. Within the last year the measures taken by the American president in establishing the maximum remuneration for chief executives working in institutions bailed out by the government. The action brought out the gravity of the compensation issue in public debates.

Indeed the remuneration of CEO’s has been on the rise in the last 15 years. During the period 1934 through 1938, the average salary and bonus for CEOs of leading companies was $882,000. Since 1982 until 1988, the average salary and bonus for the CEOs decreased to $843,000 (Tosi et al, 1989). The gap between the executive and the non-executive staff members has been rising. The major defining factors in establishing the level of remuneration are the size of the organization, the level of experience and expertise offered by the executives and the nature of business. The main categories of remuneration available are the basic pay, bonuses and allowances as well as stock options, and long-term incentive plans (Charles & Brian, 1988, p34)..

Bonuses are mainly based on the performance of the executive while the basic pay and allowances depend on other factors such as the ability of the organization to support the payments. The pay is higher in larger firms than in smaller firms however this relationship is diminishing over time. Smaller firms have found the need to attract highly qualified executives by offering high pay. The worldwide total remuneration report of 1997 shows the diminishing pay/sales elasticities for the period between 1970 to early 1990’s (The Wall Street Journal Survey of CEO Compensation, 2009, Par6)

There are numerous justifications for the often high payment packages are numerous. The most touted reason is the fiduciary duties offered. CEO’s and other senior officers at the corporations exercise some special duties that are accompanied by great responsibilities in comparison with other employees. Exceptional duty of care and royalty is the basic prerequisite for chief executives. The executives are the top most leaders of the corporations and their decisions have immense effects on the success of failure. The fiduciary duties bestow responsibility on them to diligently act in the best interest of the said corporation. This kind of responsibility and royalty requirements cannot be easily repaid. It is in this light that their packages differ significantly with those offered to other employees (Charles & James, 2003, p24).

Paying CEO’s highly not only motivates them towards developing best business models and structures but also ensures adequate and effective control of the entity’s resources as well as beneficial influence on the company’s prospects. More importantly, the executives wield fiduciary duties mainly on a moral rather than a legal sense (Moriarty, 2009, p8).

Most research on compensation has been based on economic theory but it is increasingly becoming clear that numerous non-economic factors are important in determining the pay offered to executives. Some studies have established that the form of organizational control prevalent in the directly affect the structure and level of executive compensation. Other studies suggest that the use of wage surveys as well as a common set of compensation consultants determine levels of remuneration (Scott, & Brian, 2009, Par9).

Appropriate compensation for CEO’s is also determined by the normal factors that determine remuneration for all other jobs. Effects in ensuring adequate attraction is availed for the jobs, motivation effects are achieved and the retention rates are high rank first. Considering the extra responsibilities described above, the executive jobs therefore must attract higher pays in order to lure determined and qualified personnel to take up the jobs. This can be supported by the fact that the structure of remuneration of CEO’s is not any different from that of other salaried employees. On average CEO’s receive 50% of their pay in form of annual bonuses though the ratio is higher for American firms (Carol, 2009, Par3).

The differences in salaries between the CEO and vice president are known to be very high. On a day when one is promoted from being a vice president to becoming the CEO, the remuneration package may triple. It is not easy to understand how the skills of the said person triple in a day. Therefore there is minimal economic sense to such action. This portrays remuneration of CEO’s as more of a tournament or lottery (Kevin, 1998, p6).

There exist social psychological explanations to the compensation levels of CEO’s. The most important is the fact that the chief executives remuneration is set by the compensation committee of the board of directors. This committee is comprised of very few board members who are not members of the management. This means that they have little interest in cost cutting measures. The methods used in arriving at the compensation are seldom based on economics mainly because it is never easy to gauge the performance of CEOs (Whittlesey, 2006, Par5.). This therefore leaves room for social comparisons instead of economic considerations. The committee members compare their own incomes as well as those of other CEO’s in establishing a suitable level of income for the CEO. More often than not, the figure arrived at is always higher than if the criteria used was based on economic theory (Lucian, & Jesse, 2003, p3).

The issue of separation of ownership and control presents another avenue for exorbitant compensation regimes. Management controlled firms as opposed to owner controlled firms are less likely to emphasize on performance standards. In this regard the management controlled firm may pay more to the chief executive as compared to the owner controlled firm (MacDonald, 2009, Par5).

The notion that CEO’s are often overpaid is not far fetch as far as the current remuneration trends are concerned. The need to attract retain and motivate highly effective chief executives cannot be challenged. However, there exists ethical and moral basis upon which the extremely high levels of remuneration are not justified. It is clear that in some of the scenarios observed, the huge pays cannot be supported the economic activities of the said firm. This means that despite the need to maintain the high status availed through the holding of top positions, considerations of performance as opposed to status must reign. This is the best way to ensure best corporate management.

Reference List

Carol B., 2009. Total Compensation Package as CEO of Yahoo! for 2009 – 2013. Web.

Charles, A. & Brian, G, 1988. CEO Compensation as Tournament and Social Comparison: A Tale of Two Theories. * Academy of Management journal 1996, Vol. 39, No. 6, 1568-1593.

Charles A., & James B., 2003. Social Capital At The Top: Effects Of Social Similarity And Status On CEO Compensation.

Kevin J. Murphy, 1998. Executive Compensation. Marshall School of Business University of Southern California.

Lucian A. Bebchuk & Jesse M. Fried, 2003. Executive Compensation as an Agency Problem. Journal of Economic Perspectives. Vol17 (3)

MacDonald, C., 2009. Ethics in CEO Compensation. Web.

Moriarty, J., 2009. How Much Compensation Can CEOs Permissibly Accept? Business Ethics Quarterly.

Scott, D., & Brian Z., 2009. CEO Compensation. Forbes. Web.

The Wall Street Journal Survey of CEO Compensation, 2009. Web.

Whittlesey, F., 2006. Perspective: The great overpaid CEO debate. Web.

Laptop Computers In Police Cars: Benefits & Drawbacks

Introduction

The Issue or Problem on Which the Investigation Focuses

As criminals become more sophisticated, elusive and technically perceptive, information and communications technology (ICT) has been harnessed to optimize the effectiveness of law enforcement in general and the police in particular. One such technological advance is the by-now ubiquitous portable handheld and car-installed laptop computer. These inroads occurred no later than the mind-1990s, a rather belated response considering that IBM introduced the first commercial portable computer in 1975 and Dulmont Magnum the first flip-form design in 1982.

There are obvious advantages to police on patrol being able to access crime and vehicle registration databases in some detail, efficiently bypassing desk clerks and 911 operators. There have also been a few unforeseen problems associated with the use of the laptop computers in police vehicles, such as safety issues, data security issues, and health issues. This paper will investigate these problems and their prevalence in respect to the utilization of the laptops in the police vehicles. Lastly, this paper will attempt to discover alternative solutions to the problems examined.

Stakeholders and Locus of Investigation

The primary stakeholder for this investigation is the Morgan’s Point (TX) Police Department, in particular officers on the beat and manning patrol cars. As well, one can count the Police Commissioner for administrative issues, the city government and the citizenry for whatever benefits mobile devices lend to police efficiency and civic order. More generally, stakeholders can include the Federal government (whose predisp-osition for giving grants to equip police forces may well be reinforced by the outcome of this study) and other police departments around the nation (drawing lessons from the salutary effects or drawbacks, as the case may be, of the Morgan’s Point experience).

Organizations, Policies, Programs and Services Affecting the Issue in the Local Context

Law enforcement agencies that utilize laptop computers in their patrol vehicles are responsible for creating and governing the policy and procedures for the use of the laptop computers in the police vehicles. There are policies and procedures in place set forth by City, State, and Federal government agencies, as to the security of the confidential information stored in the laptop computers in the police vehicles. The police departments must also examine any possible health risks faced by officers using the laptops.

Research Purpose

The purpose of this investigation is to determine what the advantages are of equipping police mobiles with laptops, at least going by the experience in Morgan’s Point. At the same time, the research will examine the extent to which safety, privacy, and health of all stakeholders may be compromised by officers using laptop computers in their patrol vehicles. Accordingly, the study should enable a conclusion as to whether the benefits of the laptops in the patrol cars outweigh compromises and risks.

Significance of the Study

Enabling as it does an evidence-based and updated assessment of the positive and negative benefits associated with installing laptops in police cars, this study should afford police departments nationwide the opportunity to either rapidly expand or proceed more cautiously with the use of laptop computers in police cars.

Relevant Literature in Brief

Federal grants and special municipal budgets have been necessary owing to the large outlays entailed for ITC capital equipment, training, database creation/conversion/.

maintenance, and network subscription costs. Nonetheless, police use of laptops goes back at least as far as 1997 in the case of the West Broward, Fort Lauderdale, FL police department (Lorente, 1997). That same year, a Federal grant of $300,000 enabled the Hickory (NC) PD to give all officers on patrol a laptop so they could bypass already-overworked dispatchers and obtain criminal and vehicle registration records while going about their job (Charlotte Observer, 1997).

Other than as more modern and efficient means of retrieving data, Snow (2007) points out that in-car laptops save officers the task of writing down notes on next assignments, send reports by filling in ready-made forms, leverage the combination of geographic information systems and city maps to locate fellow officers and emergency “hot spots”, and identify known criminals with facial recognition technology. All in all, police officers attest, laptops free up time spent on desk work and increase street presence. On the other hand, one danger come in the form of laptops becoming projectiles during high-speed chases.

Proposed Methodology

Since the public discourse about equipping patrolling officers with handhelds and in-vehicle laptops can be strident one or the other, this research must at least begin to establish the incidence of: a) injury and loss of life pedestrians face because officers are distracted when accessing their laptops while driving; b) any occupational safety issues that the officers confront owing to the ergonomic or radiation properties of laptops; c) advantages fostered by detailed and instantaneous access to police databases; d) the risk of data and identity theft when laptops are stolen; and, e) other negative outcomes. Moreover, this investigation should be so empirically rigorous as to enable quantification in later stages and so reliable as to be replicable using the same methods and equivalent samples in other settings. Ultimately, it is the purpose of this and similar investigations to permit evidence-based alternative solutions and actionable decisions to be carried out.

Given the defined stakeholders and locus, four target respondents apply for the purposes of this study: a) user or non-user police officers; b) the city government and upper ranks of the police hierarchy insofar as they decide on, fund and evaluate the use of, laptops in police vehicles; c) ordinary citizens for their perceptions about police effectiveness as enhanced by remote data access; and, d) other “target publics” such as reporters on the local crime beat and community media in general.

The context of this study has two elements. The first is familiarity, centered on the fact that all stakeholders have either used a laptop or seen one used close at hand by family, peers at work, and in public places such as diners, parks or malls. Secondly, attitudes towards police use of laptops and handhelds have undoubtedly been shaped by movies and mass media. This second factor means accepting or rejecting opinion bear tracing for sources of information and attitude change.

In the absence of precedents – similar studies in other cities and established study instruments relevant to the research purpose – the researcher must therefore formulate an exploratory research approach based relying principally on qualitative interviews and case study. Stringer and Dwyer (2008) articulate the rationale for these as founded on the value of participatory research in the community work aspect of law enforcement, the idea networking value of having feedback from multiple stakeholders, that both depth interviews and the case study method are characterized by being open-minded about differing perspectives, and how a trained investigator can lend value to the raw data by informed interpretation.

The choice of individual depth interviews over, say, focus groups is a matter of trading the insight of individual experience or perspective for the synergy gain normally expected of group sessions. The researcher expects the investigation to be informed by a wide range of anecdotes that illustrate the advantages and drawbacks of portables and in-car laptop units. A focus group may be cost-efficient but combining reporters, citizens, representatives of city hall and the police superintendent, user and non-user police officers is liable to be raucous and ineffective because the different stakeholders just do not share each other’s perspective. Rejection rather than synergy is likely to result. As to the case study, the researcher will trace the introduction of mobile computers in the city police force and the results as the project rolled out. Data-gathering will be both primary (interviews with decision-makers) and secondary (examination of the project proposals, field evaluation reports, etc.).

References

(1997, Sept. 5). All Hickory police to carry a laptop. Charlotte Observer, p. 1C Metro section.

Lorente, R. (1997). Sunrise police get laptops computers in cars will give officers more time to do job. Sun Sentinel – Fort Lauderdale, p. 3.

Snow, R. L. (2007). Technology and law enforcement: From gumshoe to gamma rays. Santa Barbara, CA: Greenwood Publishing Group.

Stringer, E. & Dwyer, R. (2008). Action research in human services. New Jersey: Prentice-Hall.

Mood Disorders: Depression Concepts Description

Depression is a mood disorder and is generally accompanied by feelings of intense sadness and hopelessness (Hammen, 1997). Anyone, irrespective or age, race or gender can be afflicted with depression and it is one of the most common illnesses afflicting people around the world. According to WHO, about 121 million are affected by depressive disorders globally (Callahan and Berrios, 2005). In the United States about 19 million people are diagnosed with depression every year (Paolucci, 2007). This means, more people in the US have depression than have heart disease, cancer and AIDS combined. Despite this, it is ironical that less money is spent on depression compared to tooth decay or heart disease or muscular dystrophy (Paolucci, 2007). Though it has wide range of symptoms, ranging from mild to moderate to severe, depression is a treatable medical illness. When not treated, it can lead to serious physical and mental problems and can even lead a person to suicide.

Often seen as a mental disorder, depression can also cause both emotional and physical problems. Some of the physical symptoms of depression are lack of energy, fatigue, weakness, slowed movements, agitation, insomnia, difficulty concentrating and pain” (Callahan and Berrios, 2005, p. 5).It can also complicate existing physical problems. Emotional symptoms include intense feelings of sadness, hopelessness and loneliness. The DSM IV holds that for a person to be diagnosed with depression there must be five out of the following nine symptoms present during a two week period: depressed mood; reduced interest in activities; weight gain or change in appetite; insomnia or hypersomnia; slowing down of movements; fatigue or loss of energy; low self esteem; inability to focus or think; and suicidal tendencies (Shaw and deMaso, 2006)

Studies of families with histories of depression show that depression tends to run in families. This could be explained either by genetics or by environmental theories. Twin studies show that if one in the case of identical twins, there is a 70% chance that twins will have the same risk of getting depressed. However, the risk for unidentical twins is only 25%. If heredity were to be the cause, the shared rate of risk for depression would be 100%. Since this is not the case, it is easy to conclude that genetics alone does not make a person vulnerable to depression; there must be other factors involved. The fertile ground theory suggests that both heredity and environmental factors work together in causing depression. Some examples of environmental factors that can lead to depression are “losing a parent early in life, separation or divorce of parents, rearing patterns, abuse, low socioeconomic class, and recent life stresses” (Ainsworth, 2000, p. 4). Modern brain imaging technologies show that improper functioning of certain neural circuits in the brain result in depression (Lewis, 2003). Imaging studies also indicate that critical neurotransmitters–chemicals used by nerve cells to communicate–are out of balance. Thus depression can be caused by any or a combination of risk factors such as:

“history of depression, family history of depression, suicidal thoughts, female gender, postpartum or perimenopausal period, serious medical illness, lack of social support, high stress levels with family, job, finances, relationship and history of alcohol or drug abuse” (Paolucci, 2007, p. 8)

There are three major types of depression: unipolar or clinical or major depression where the patient’s mood varies between normal and depressed and manic-depression, Minor depression or dysthymia where the patient has all the recognized symptoms of major depression but not enough to disable the person (Paolucci, 2007); and bipolar illness where the patient’s mood fluctuates between very highs and very lows (between euphoria and depression) (Klein and Wender, 2005). Unipolar depression is also known as clinical depression or Major depression.

The most effective ways of treating people with depression include pharmacotherapy, psychotherapy or a combination of both. Studies show that earlier the treatment, lesser the chances of relapse. Initially, depression was treated using tricyclic antidepressant drugs (TCAs) and monoamine oxidase inhibitors (MAOIs) that influenced the functioning of neurotransmitters in the brain such as serotonin and norepinephrine. But these drugs had many side-effects. Newer medications such as the selective serotonin reuptake inhibitors (SSRIs) have shown greater efficacy with lesser side effects making it easier for people to stick to treatment. Thomas Laughren, M.D., of the FDA points to the fact that different drugs seem to work for different people and it’s difficult to predict which drug will be most efficient for a particular person. Generally treatment using antidepressive medications tends to be long and extend over three to four weeks (Lewis, 2003).

In psychotherapy the patient is allowed to discuss his feelings with a mental health professional seeking better understanding of his depression and how to cope with it. Psychotherapy works best in the case of bipolar disorder helping people to diagnose the disorder very early and helping to prevent a bipolar episode. Richard O’Connor, Ph.D., a psychotherapist in Canaan, Conn., suggests that self-help is the best way out of depression and it is important that people assume responsibility for their own recovery, resort to good healthy habits and regularize their life patterns (Lewis, 2003). However, when depression does not respond to medications or psychotherapy, it may be treated using electroconvulsive therapy (ECT). In ECT, certain points on the patient’s head are stimulated using electrical impulses by placing electrodes and a 30-second seizure is caused within the brain (Lewis, 2003). For full benefit, ECT may be carried out thrice per week. ECT is supposed to work like medications by affecting the brain’s neurotransmitters.

Bibliography

Callahan, M. Christopher and Berrios E. G. (2005). Reinventing depression: a history of the treatment of depression in primary care, 1940-2004. Oxford University Press US.

Hammen, L. Constance (1997). Depression: Reflections of Twentieth-Century Pioneers. Psychology Press.

Klein, F. Donald and Wender, H. Paul (2005). Understanding Depression: A Complete Guide to Its Diagnosis and Treatment. Oxford University Press, New York.

Lewis, Carol (2003). The Lowdown on Depression. FDA Consumer, 37 (1).

Paolucci, L. Susan (2007). Depression FAQs. PMPH-USA.

Shaw, J. Richard and DeMaso, Ray David (2006). Clinical manual of pediatric psychosomatic medicine: mental health consultation with physically ill children and adolescents. American Psychiatric Publication, Jackson, MS.

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