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Asking the Right Questions - Term Paper Example

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The term paper "Asking the Right Questions" indicates that asking the right questions is crucial in critical thinking. This will provide a sound basis for evaluating the reasons given for arriving at a conclusion. Browne and Keeley (2010) indicate provides a list of critical questions. …
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Asking the Right Questions
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Download file to see previous pages The author of the paper states that some or all of the given questions can be used by critical thinkers to analyze and evaluate reasons provided as explanations for the conclusion drawn on a particular matter. Evaluation of the PDQ Case The issues and the conclusion in the PDQ case is that CEO’s pay is exorbitant when compared with the salary levels in similar companies. The reason given is that the CEO has received double-digit increases – reportedly 40% while over the period growth has been only a mere single digit of 3%. In addition to that, a story that appeared in the local newspaper indicated that Raymond James is “The Highest Paid Valley Executives.” However, before we can agree with this conclusion we have to evaluate the reasons given and to determine if they provide adequate evidence on which such a conclusion can be based. Benchmarking is the process of using industry figures as a point of reference in evaluating a particular scenario. In this case, the figures relating to compensation are being compared with those of similar companies in the industry. Benchmarking Raymond James's basic pay with that of similar companies in the industry is a good way to determine whether his pay is exorbitant. Information from the Economic Research Institute indicates that the average salary for a CEO of a company with similar characters in the same industry as PDQ for the year 2007 – the latest year for which information is available is approximately $391,659. The figures from PDQ’s human resource department indicate that the CEO’s basic pay was $506,722. This is approximately $115,000 more than the average. The fact that $391,659 is the average indicates that some of the basic salaries are higher and some are lower than the average figure. However, we do not have any information on the highest and lowest figures used in the calculation. Therefore, the information from the Economic Research Institute does not provide sufficient information to agree with that conclusion. Additionally, the information from the Economic Research Institute is not current and therefore the statement that “it is now probably much more than that since he has received raises totaling 24% in the past two years is ambiguous. Furthermore, if the lowest figure is very low this would have a major impact on the average salaries. Best Practice Best practice is a term used to describe what is considered to be a good practice that can be recommended throughout the industry. This practice is one that others in the industry look up to as a solid way of carrying out operations or in dealing with a particular matter which in this case happens to be the matter of CEO compensation. The best practice is generally copied by similar companies in the industry. However, one has to be cautious in utilizing such a practice. In terms of best practice, an independent research firm indicates that in medium-sized companies that have characteristics that are similar to PDQ the levels of compensation for CEOs fell significantly since 2002 when median total compensation declined by 7.5%. This information refers to total compensation and not basic pay which is the issue being discussed in PDQ’s case.  ...Download file to see next pagesRead More
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