Harris County Housing Authority: Case Analysis

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Pay Goals

Harris County Housing Authority was meant to be a nonprofit, governmental organization aimed at ensuring community members had proper housing. The pay levels for the organization were not to be very high as that would compromise the core aims of the organization. The nonprofit organization that received funding from the government and private builders, however, paid its executives huge sums of money. At the same time, the organization paid other employees below market requirements by around 8 to 40%. However, the company paid the workers slightly better than other housing agencies. Thus, the company did not meet the market goals despite paying employees better than other housing agencies.

Fairness of Pay levels

Perspective of HCHA Employee

The employees were receiving less than they were worth according to marker standards. Deviations that range from 8 to 40% less than the market standards for a certain qualification are significant. The comparisons serve as a good measure to ensure that the employees at the lower levels receive their expected and rightful pay. On the other hand, the company was offering huge sums of money to those in the executive positions (Eckbo, 2011). This poses as a challenge because the company was meant to offer support services to the community and not to reward the management richly. Some of the salaries that those in top management receive are outrageous and raise questions as to whether the organization is managing the finances it receives from the government appropriately.

Perspective of HUD employee

HUD employees conducted their investigations and came up with reports that the top management employees were receiving high amounts of salaries, as opposed to regular employees. The compensations of the top management were also huge. Executives could receive bonuses that surpassed $80,000. On top of that, the top management also received regular pay rises while the same officials debated on whether regular employees should have their payments increased. The HUD employees felt that it would be best if the housing agencies would have their salaries compared and posted on their website for purposes of uniformity and fairness.

Taxpayer

Taxpayers would have to worry, not because HCHA is not doing its work, but because the company is rewarding executives richly with money that comes from them. The housing agency receives money from the government, which implies that taxpayer money fund the company. Increasing payments for workers would then mean that more of the taxpayers’ money would be going to pay salaries for the organization’s company, which should be a nonprofit organization in any case, rather than to development projects.

Balancing payments

Balancing payment ratios in a company requires consideration of a few factors. How a company’s payment scales compare to those of other companies is essential, especially with the rising scrutiny of payments that executives receive by the government, the community, and the corporate community. However, the most important things to consider while making payment balances are the circumstances of the company and its prospects. The salary of the executives should mirror market capitalization rather than value at risk or operational complexity (Eckbo, 2011). These are some of the considerations that HCHA can use to save the situation. They will ensure that the regular employees receive payments that are comparable to other firms in the industry.

Reference

Eckbo, B. (2011). Handbook of Empirical Corporate Finance: Empirical Corporate Finance. Elsevier, Print.