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Discuss the following pros and cons and Which outweigh the other?
Cap executive salaries. Eliminating the pay gap altogether may not possible for some companies, but instituting a salary cap can keep the gap from growing wider.
Whole Foods has capped salaries for their top executives for more than 20 years. Originally, the salary cap ratio was set at 8 to 1, but as the company has grown, so has the salary cap to 19 to 1. That means the maximum cash compensation anyone can make with the company is about $650,000. The cap is low enough to satisfy their lower-level employees but still competitive enough to keep their key executives from leaving.
Capping salaries shows employees at every level that the organization values and cares about them. In fact, 40 percent of U.S. and Canadian employees surveyed by Virgin Pulse this year said they wished their employers cared more about their financial well-being.
In addition, employees who feel valued by their employers are more likely to be satisfied by their job, a 2014 survey conducted by the American Psychological Association found.
Capping salaries shows all employees that their skills and work are valued and important to the company.