If the CEO’s High Salary Isn’t Justified to Employees, Firm Performance May Suffer
We would like to share this article written by Dina Gerdeman featured on Harvard Business School’s website entitled, “If the CEO’s High Salary Isn’t Justified to Employees, Firm Performance May Suffer.” Researcher Ethan Rouen discovers that rank-and-file employees understand the boss deserves a big salary, but only when the number is fully explained. In addition to providing a clearer explanation of pay disparity effects, the study also spotlights the importance of corporate culture in creating value for employees.