Should how much a company pays their employees be based upon how much the company makes annually?

Question

With the exception of there being a bare minimum (aka no company regardless of their earnings can pay below a certain amount) should how much a company makes factor into how much a company pays their employees? For example, a company that brings in a billion dollars annually would be required to pay their workers more then a company that only brings in $500,000 annually. Also, as the earnings of the company increases so would the pay of their employees. Agree or disagree?

Accepted Answer

No, what someone earns should be based on their skill level, their experience, education, etc.

Answer

i also think there should be a set percentage from what a CEO earns to their lowest paid employee..

Answer

So to put this idea in perspective, if a company makes $2million one year and then has a bad year the following & only makes $200k, don’t you think that’ll create a huge negative impact on wages if paid base on company income?  Pretty sure the majority of employees wouldn’t like the instability of fluctuating income. 🤔 Sounds like a bad idea for the masses. Now, if you have a base salary & are paid bonuses based on company profit, that makes a little more sense. BUT I like the idea of individualized pay because people’s’ experiences aren’t cookie-cutter (they have different work history, education, work ethic, etc).

Answer

that doesn't make much sense to me since they're the same jobs. ones not harder than the other so they're worth equal pay. if the company wants to pay more, they can  (and some companies do do this). but no, I don't feel pay should be based off of the companies income.

Answer

I put myself in both the janitor and the CEOs shoes. If I was CEO, whats the point in having a successful business, especially if I built it myself, if I HAVE to give back all of my earnings. Why as CEO wouldn’t I just do the janitors job if we’re getting the same money? That’s silly. 
There’s different jobs, education, skill set, years of experience, etc that go into determining pay. If I was CEO and had the option to give bonuses, I absolutely would.

Answer

I think companies that offer profit sharing plans are great and believe that ethically you are required to pay an employee for the quality of their work—not the lowest you can get away with. 
However, I don’t think it makes sense that employee salary rates should be based on profit. For sure, profit should be a factor (what they can afford to pay), but not the basis. Companies that succeed will still need increasing amounts of revenue to build the business. New employees, new marketing strategies, new buildings, modernization/technologies, etc.

Answer

You’re back!!!!!!!!

Answer

No, I think that all is sorted in the sense of to get better employees you generally have to pay more. There's no need to add complexity to it, it happens naturally or if it doesnt that's fine too.

Answer

No but there are companies that are employee owned or give bonuses based on company performance. My company shares profits. We are given our salary and if the company reaches their financial goal we are compensated. It’s just common sense that small low profiting companies pay less.

Answer

I do get a profit sharing bonus when the company I work for exceeds its goals. But no, my actual salary shouldn’t be based on that. Too many factors outside my control/influence.

Should how much a company pays their employees be based upon how much the company makes annually?

Let's Glow!

The Top Baby Tracker App: Embrace New Beginnings with Tender Care

The Top Fertility Tracker App: Your Path to Achieving Pregnancy

The Top Pregnancy App: Nurturing Your Journey to Motherhood

The Top Period Tracker for Empowering Your Menstrual Health Journey