Critical Thinking Manager

Introduction

A memo by Mr. Mark Headlee, Senior Vice President of Human Resources was provided to Ms. Ursula Barnes, Chair Board of Directors Executive Compensation Committee of the PDQ Manufacturing Company. This is a medium sized company. This memo was to inform Mark of the company’s CEO compensation and what conclusion and recommendation Ursula determined. Critical thinking is important and it consists of providing analytical information then evaluating it to gain a clear understanding of the situation (Hartigan, n.d.). In this paper, the ‘11 steps of Critical Thinking’ will be applied to evaluate whether or not her conclusion was reputable based on the information Ms. Ursula Barnes provided within the memo.

Issues and Conclusions

After recognizing the conclusion within the memo, Mr. Mark Headlee’s issue in question is “what ought to be done about the compensation level for the PDQ’s CEO, Raymond James?” We could also say “should the PDQ’s CEO, Raymond James, compensation level be reduced to coincide with industry standard levels?” This is the issue because this is the main topic discussed throughout the entire memo. According to Mr. Headlee, he wants to identify if the company’s CEO’s compensation is in relation to the CEO industry standards (M. Headlee, personal communication, October 1, 2011).

The conclusion provided in the memo is an answer to the issue in question (Browne & Keeley, 2007). Mr. Mark Headlee concluded that the PDQ’s CEO vastly exceeds the industry standard and believes that the board of directors should find another CEO within the industry standard level and who can fully manage the workload as well. Thus, this is a prescriptive issue in that the memo discusses overall of what ‘ought to be done’ for this particular problem.

Reasons

The reason for this CEO compensation issue is based on evidence that provides a good explanation for the conclusion (Browne & Keeley, 2007). Mark Headlee provided his rationale as to what drove him to the conclusion above. The following reasons in the memo are:

1. Raymond James CEO percentage raise was 2% each year starting in year two of which the compensation committee approved in 2007-2009 totaling a 48% overall increase.

2. PDQ’s overall increase was 3%!

3. The nation’s economy fell into a recession on 2007 which reflected in the company’s decreased growth rate of 15% (from 18% in 2005). However, Raymond’s growth rate in 2007 had increased to 24% (from 8% in 2005).

4. Based on research from the Economic Research Institute, the industry standard is in the region of $391,659. Raymond is making $635,580 as of 2009.

5. Evidence that was suggested in a scholarly article is that CEO’s should not be overpaid if they are