Does a company have an ethical duty to find a balance between remaining profitable?
For a company to stay afloat and running it is fundamental for it to make a profit. However, simultaneously, it is also important that the company pays their employees compensation that compliments their skills and abilities and allows the employee to live comfortable life. A company cannot slack in one category as both these aspects are very intertwined with each other. Therefore, a balance between remaining profitable and paying a decent salary to employees should be a goal for an organization.
Importance of balance between profits and wages
Compensation, benefits, and the ease provided to employees become a matter of ethics in companies. With all the movements and unions nowadays, organizations can get a lot of negative publicity if they do not provide a living wage for their employees while making enough profit. Moreover, this could harm the employee’s morale as they feel unappreciated and used when they see that the organization is not paying them the amount they deserve even when they could. An employee could lose motivation and have an overall decrease in productivity, impacting the organization’s outputs and goals and eventually decreasing the profits. This could turn into a cycle that will not benefit both groups and companies should avoid it.
Many employers in the US are part of certification programs that recognize these employers for paying a living wage, impacting thousands of employees who have a low salary worldwide. More than 2500 small to medium-sized businesses are part of the living wage network and ensure that employees are paid a living wage.
Taking away an employee’s stress due to low wages will benefit the employer through multiple factors.
Firstly, living wages grow the economy as consumer demand increases when spending power increases. Therefore, consumers buy more products and services which positively affects the profit of a company. Hence, a cycle is created where both parties are in a win-win situation. Employee morale, attitude, health, and quality of work also increase when they receive a living wage which benefits the organization as turnover and absenteeism reduce. This saves organizations the cost of replacing employees and dealing with the cost of training new ones.
Therefore, organizations need to find a balance between creating a decent profit and giving back to the employees with the wages they deserve and can easily live a comfortable lifestyle.
The balance between remaining profitable and paying a decent salary is important!
How do business ethics affect profitability?
Many people believe that business ethics and profitability are diametrically opposed. This is not always the case. There are many examples of businesses that have been able to achieve both. Business ethics are important because they provide guidelines for how businesses should operate. These guidelines can help businesses avoid negative publicity, legal problems, and other issues that can harm profitability.
What is the difference between minimum wage and living wage?
The minimum wage is the lowest hourly wage that an employer can pay their employees. The living wage is the hourly wage that an individual needs to live a comfortable life. The difference between minimum wage and living wage varies from place to place, but in general, the living wage is higher than the minimum wage. In some places, the difference is significant. For example, in New York City, the minimum wage is $15 per hour, while the living wage is $26.50 per hour.
Do people work harder when they are paid more? Some people believe that workers will perform better if they are paid more. The theory is that if workers are compensated well, they will be motivated to work harder. However, there is no guarantee that this will always be the case. Some workers may perform just as well whether they are paid more or less. It really depends on the individual worker and what motivates them.
How do you find out how much you should be getting paid?
There are a few different ways to find out how much you should be getting paid. The first is to research the going rate for your position in your area. You can look at job postings online or in newspapers to get an idea of what companies are offering to pay for your particular skill set. Another way to find out how much you should be getting paid is to ask around. Talk to friends, family, and acquaintances who have similar jobs to yours and see what they are earning. Finally, you can always negotiate with your employer for a higher salary. If you feel like you are being underpaid, make sure to do your research and come armed with concrete evidence before asking for a raise.
References about the balance between remaining profitable and paying a decent salary for further reading:
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