Why do we accept low pay for key workers as the norm?

I've been thinking about pay a lot recently, in trying to re-think reward in my organisation. When you think logically about most roles in just one organisation, there isn't much to justify the huge disparity in pay rates that are given. We all come to work, usually for a standard amount of hours, put in a reasonable amount of effort and (hopefully) gain some satisfaction from the work we do alongside the pay that we receive - but even the aim for a reasonable wage ratio is that the top earners in an organisation should receive 20 times as much pay as the lowest (and currently most FTSE businesses would be nowhere near as close as 20x).

Logically, we should pay our cleaners more than our chief executives, because I think most of us would get more intrinsic satisfaction (and therefore less requirement for extrinsic motivation) from the latter. And you could probably sustain an organisation for far longer without a chief executive than without its cleaners.

It's just down to labour markets - the skills required for cleaning can be learned quickly and build upon the daily skills that we all need in our personal lives, whereas leading a company demands (probably) qualifications, experience and the type of personality that narrows the field significantly. Care is similarly accessible to a wider labour market, at least in theory - though in practice, I think you need to be a pretty amazing kind of person to undertake care work on a regular basis, whether paid or unpaid.

Nina Waters said:

Logically, we should pay our cleaners more than our chief executives, because I think most of us would get more intrinsic satisfaction (and therefore less requirement for extrinsic motivation) from the latter. And you could probably sustain an organisation for far longer without a chief executive than without its cleaners.

That's only one interpretation of logic based on one value set. An alternative would be who adds most value and fundamentally an CEO will help create and sustain the employment of all the people in that business, their salaries, livelihoods etc. A cleaner whilst important doesn't. A CEO may well have far higher demands on them, stresses and pressures etc.

Appreciate that Keith, and I'm perhaps being flippant but also trying to think about what we are rewarding. I totally accept that responsibility is key to increased pay - and the burden that falls on those at the top of an organisation in terms of constant monitoring and worry will be very different from those who are its lowest paid, combined with the impact that a very strong CEO can add.

It goes much beyond the level of operational responsibilities for me Nina. A CEO of a listed company have little or no job security and can be removed by the Board with little or no notice - the days when big payouts were made in these situations are long over for the majority of CEOs.

They also carry the personal and civil criminal responsibility for many of the wrongdoings that their employees can undertake - believe me with 200,000 people in 70+ countries it's unealistic to think that they can have day to day control over everthing that happens, in every country in the world.

In the last 30 years of my life my CEOs have typically worked 70+ hour weeks, taking 1-2 weeks "break" a year (no right to disconnect from the shareholders and investors) - when you have global activities, phone exchanges/meetings can be necessary at any time of the day or night, and require immediate decisions. I'm not complaining for them, They have chosen this lifestyle because it suits them and because the rewards go a long way to compensating for minor inconveniencies like no family life. They also command these salaries because it' a seller's market with very few exceptional people who can function well at this level.

Personally I find it more shocking that footballers and top cinema actors receive salaries much higher than those of our CEOs who by and large are seeking to add value to society by adding value to their company and to its employees through sustainable growth.

It goes much beyond the level of operational responsibilities for me Nina. A CEO of a listed company have little or no job security and can be removed by the Board with little or no notice - the days when big payouts were made in these situations are long over for the majority of CEOs.

They also carry the personal and civil criminal responsibility for many of the wrongdoings that their employees can undertake - believe me with 200,000 people in 70+ countries it's unealistic to think that they can have day to day control over everthing that happens, in every country in the world.

In the last 30 years of my life my CEOs have typically worked 70+ hour weeks, taking 1-2 weeks "break" a year (no right to disconnect from the shareholders and investors) - when you have global activities, phone exchanges/meetings can be necessary at any time of the day or night, and require immediate decisions. I'm not complaining for them, They have chosen this lifestyle because it suits them and because the rewards go a long way to compensating for minor inconveniencies like no family life. They also command these salaries because it' a seller's market with very few exceptional people who can function well at this level.

Personally I find it more shocking that footballers and top cinema actors receive salaries much higher than those of our CEOs who by and large are seeking to add value to society by adding value to their company and to its employees through sustainable growth.