Slashdot Mirror
Company Testing Standardized Salaries Is Struggling
jmcbain writes: In April 2015, Dan Price, the CEO of online payments company Gravity Payments based in Seattle, announced that all employees would have their salary bumped up to a minimum $70,000. Slashdot covered this news. Since that time, however, things have not gone well. Some employees quit because they felt it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Furthermore, after reducing his own salary from $1M to $70K, Mr. Price is now renting a house 'to make ends meet'. On an unrelated note, Mr. Price's brother, who is a co-founder of the company, is suing him.
Having run a company, I can get this...it's a refreshing and seemingly decent approach to sharing the wealth.
Great contrast to all the money-grabbing, "screw the employee" bosses that are in the news all the time.
Maybe where he went wrong is not allowing an "upside".
Sure, not everybody who *thinks* they deserve extra really do.
But in my experience some sure as hell do...the trick is to identify them and give them fair value.
(My top staff regularly got 20% over market rates - they earned me far more, so I was happy to pay.)
Snip: "You can ignore economics, but economics won’t ignore you.
That’s the tough lesson Dan Price, CEO of Gravity Payments, a Seattle credit-card processing company, is learning.
Four months ago, Price announced he’d slash his own multimillion-dollar pay and set a company-wide $70,000 minimum wage.
He got the idea after a friend explained her difficulty paying back student loans and surviving on $40,000 a year — a salary many Gravity employees were making.
Price’s stand against income inequality made him an immediate darling of the left.
But key employees saw it differently.
Financial manager Maisey McMaster liked the idea at first — until she thought about it.
“He gave raises to people who have the least skills and are least equipped to do the job,” she told The New York Times. Meanwhile, “The ones who were taking on the most didn’t get much of a bump.”
She thought it would be fairer to give smaller raises, with the clear chance to earn more with experience. Price brushed off her doubts; she quit.
Also out the door: Web developer Grant Moran. He says, “Now the people who were just clocking in and out were making the same as me.” Plus, having your pay level a very public matter is a problem, with “friends now calling you for a loan.”
Moral of the story: Some people work harder than others; some have stronger skills — and they don’t think it’s fair that they’re paid the same as others.
Price will soon be left only with workers worth his chosen minimum wage — or less.
The company is already in chaos thanks to the policy — but the big problem is ahead, as it tries to keep growing and innovating with only mediocre talent"
John Galt, the pivotal figure in Atlas Shrugged, once worked as an engineer with the fictional Twentieth Century Motor Company. After the original owner died, his heirs decided that employees would work according to their ability, but be paid according to their needs.
Needless to say, it did not work out well.
I tried. I got the book and started reading. When I got page 100 I stopped and thought about what I had read, which was nothing. Whatever story she tried to tell in that book, she took her sweet time in getting the plot going. I threw the book away. Any author who can't start a story within 100 pages is a shit author who needs a better editor.
Maybe I'll try again someday. I'll start halfway through the book and see if maybe the story starts by then.
WARNING, SPOILERS AHEAD
Halfway through the novel, the protagonist meets a hobo who used to be a worker at the Twentieth Century Motor Company, whose bankruptcy years before was a key event in the novel for several reasons. He tells what had actually happened there:
After the founder's death, the heirs decided to manage the company under the motto: "From each according to his ability, to each according to his needs." The consequence was obvious: all workers pretty much turned into beggars, inventing more needs, while anyone who demonstrated competence was required to work harder. While the press praised the "enlightened" management, productivity collapsed, quality went to shit, and clients ran away.
Circumcision is child abuse.