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Executive Compensation: The More Leaders Make, the Meaner They Get

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Let's put aside that executive compensation debate for a moment and consider instead what Sreedhari Desai is studying. Does sky-high pay lead to worse treatment of workers? Does it make leaders, literally, meaner?


Desai says the answer is yes. "Increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy" she writes (with co-authors Arthur Brief from the University of Utah and Jennifer George of Rice University) in the paper "When Executives Rake in Millions: Meanness in Organizations," which was presented at last week's International Association of Conflict Management meeting in Boston. (It's under review with Administrative Science Quarterly.)

Desai's a bit of a polymath. She holds degrees in metallurgical engineering and finance, is working on her doctorate in management and is a fellow at Harvard Law School's Program on Negotiation. "When I delved into organizational behavior, I started looking at Adam Galinsky's work," says Desai. "It made me want to look at income disparity, power and moral disengagement. Does this income gap help the leaders to feel comfortable setting up policies that hurt the people at the bottom?"

by Scott Berinato for Harvard Business Review

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US investment in the Netherlands from 2000 to 2010 was nine times more than US investment in China during the same period. US investment in the UK was more than seven times more, and in Ireland nearly three times more, than in China. (Source: Transatlantic Economy 2011

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