Reference no: EM132809044
A thought experiment on pay inequality
Kate Pickett and Richard Wilkinson: 'Inequality strikes at our health and happiness'
1) State the main argument of one of the assigned readings (Wilkinson & Pickett or Freeman) in one or two sentences
2) Write on the following thought experiment.
Imagine that you can choose among three companies to work at. The work you do will be the same in each company, and all other aspects of the job are similar among the companies, except for the pay system. In each company, you will be paid at the end of the year based on your performance. Each company has 100 employees.
Company A: The average pay is $50,000 per year. The top performer will make $55,000, the bottom performer will make $45,000, and everyone else will make somewhere between $45,000 and $55,000 depending on their performance.
Company B: The average pay is $50,000 per year. The top performer will make $75,000, the bottom performer will make $25,000, and everyone else will make somewhere between $75,000 and $25,000 depending on their performance.
Company C: The top performer will make $1 million, the second-best performer will make $500,000, the third-best makes $250,000, and everyone else will make $35,000.
Questions:
- Which company (A, B, or C) would you prefer to work at, and why?
- Which pay system would motivate you to work the hardest? Which one would motivate you the least?
- Which pay system would motivate most employees to work the hardest? Which one would motivate them the least?
- Where are co-worker cooperation and employee-management relations likely to be the best?