BOSTON, July 8 (UPI) — The higher the compensation of U.S. chief executive officers, the more poorly employees in their organizations are treated, researchers found.
Sreedhari Desai of Harvard University, Arthur Brief of the University of Utah and Jennifer George of Rice University found a higher income inequality between executives and ordinary workers resulted in executives perceiving themselves as being all-powerful and the perception leads them to maltreat rank-and-file workers.
The researchers said from 1990 to 2005, the average U.S. CEO pay increased almost 300 percent after adjusting for inflation — with a CEO of a Standard and Poor 500 company now averaging $10.9 million annually.
Wealth, in turn, increases the perception of power, defined for the study as the capacity to influence or control other people or advance one’s own goals.
The pay of the CEO is used not only as a signal across outside organizations that the CEO is powerful, but when a CEO makes 400 times the amount earned by rank-and-file workers, the workers’ response to the CEO’s behavior perpetuates the CEO’s belief in his or her increased power, the study said.
Research has shown power leads to selfish and corrupt behavior, reduced empathy, less openness to the perspectives of others, a tendency to objectify and stereotype others, sexually harass those with low power and in general leads executives to behave in socially inappropriate ways, including breaking labor laws, the study said.
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