CEO Layoff Pay, Article Review Example

The article mentions that the CEOs who laid off the most workers were paid higher on the average. I agree with the assessment put forward by the study’s primary author Sarah Anderson that such CEOs may also be compensated more because they are seen as tough guys, not afraid to take tough measures (Malone, 2010).

I see this situation as a problem because it protects the interests of the company leaders at the expense of the other stakeholders such as employees and shareholders. The article also justly points out that this approach is short term and while it may boost the bottom line, it hurts the company in the long term through low employee morale and high costs of rehiring and retraining employees.

I would suggest CEOs to keep employees, even when the profits may be declining because it will strengthen employees’ loyalty and will also ensure the company doesn’t lose talent to the competition. The company’s owner could also help the situation by designing compensation policies that reward CEO’s for long term performance and not year-to-year results.

As an HR manager, it would be important for me to convince the employees that any lay-offs were inevitable and CEOs are not benefitting at the expense of the employees so that their morale is not hurt. I may provide examples of how certain decisions by the CEOs, not related to layoffs, helped the company. Similarly, I may also provide examples of the competition that may have lain off even more workers. I may also demonstrate how avoiding lay-offs might have done more damage down the road.

Work Cited

Malone, S. (2010, September 1). CEO layoff leaders also led in pay in ’09: study. Retrieved November 2, 2013, from http://www.reuters.com/article/2010/09/01/us-usa-corporate-layoffs-idUSTRE6800VW20100901