Strategic Human Resource Management

Section Four

the United States and are a frequent subject of controversy to
both employees and the public alike, particularly when
executive compensation seems to run to excess. Regardless of
the controversy, there is still need for sound executive
compensation systems. For many years, executive
compensation systems have involved a myriad of bonus
systems, stock options, deferred compensation, and an
elaborate set of perquisites. Nonetheless, there is increasing
skepticism whether separate systems should exist for
executives. Rosabeth Moss Kanter has described this problem
as follows:

Every year routine company surveys of

employees find greater skepticism about the

fairness of traditional pay practices. Every year

the numbers seem to get worse, possibly because

traditional practices are skewed toward rewarding

the climb to high positions rather then [than] the

contribution to organizational success.^45

As a result of problems with compensation and the notion
that compensation should be directed toward employees’
contributions instead of their positions, Kanter has
recommended the following: “Large executive bonuses or stock
options should not be allowed at all unless comparable bonus
systems exist for employees in general.”^46 If Kanter’s