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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.
There is a saying in France that says:
"the heart is on the left, but the wallet is on the right."
While I partly agree with you, I would like to share my own experience.
20 years ago, I worked for a game company where the boss wanted full equality, so he paid everybody around the same salary.
While the approach is humanist, in the end it did more bad than good.
There was a huge trust between members, but beginners were terrible and were slowing down the experienced people.
I wholeheartedly loved working for this company, but it collapsed after finishing the first game.
The lessons are:
1) pay people as low as you can, but as much as they need to live a comfortable life (and won't want to quit your company). Everybody has different needs, and I don't count "home cinema" as a need !
2) pay well your better workers, don't count on their faithfulness especially if you fire people randomly
3) be frank. People (especially the awful workers) are obsessed why they don't earn as much as their colleagues. Tell them why they don't deserve a higher salary.
Imagine that.
Differences in pay exist for a reason: Because different people perform functions of different value to the company.
And some people feel they deserve more pay than others, regardless of whether that's actually true. Don't underestimate the power of "ego".
Why, actually, does it matter to one person what another gets paid? If *you* are getting paid a fair wage for your efforts and can live the life you want/need to live, why does anything else matter? It's not a contest of whoever has the most wins.
Personally, I make more than I need. I have deferred raises in favor of my teammates who need the extra money more. I have volunteered to take time off w/o pay, when the work load permits, to prevent teammates from being laid off. They have families and bills, my wife died in 2006 and I'm debt free. In the past 9.5 years, I've given about $100k to friends who were in trouble, through (almost) no fault of their own or who needed something extra to pursue bettering themselves. They didn't ask for help and were willing/trying to make it on their own -- I could help so I did.
I have also had a few comments about my behavior. A few years ago, when I volunteered to reduce my hours to reduce the impact of a budget shortfall on my teammates, because I could live on less money, one of my manager's managers remarked that I could keep working and give him the extra money I didn't need. I replied that would be happy to give him *all* my money, if he'd give me my wife back. (Haven't heard from him since.)
According to a NYT article, Dan Price bumped the salaries of his employees when he learned that many people were having trouble making ends meet on their salaries and decided to pay them a more livable salary. Some of his other employees got ticked off because of what they think people *deserve* to be paid.
Some CEOs make 100-300 times what their lowest-paid employee makes. Based on the CEOs you know or know about is that right? Perhaps we'd all be better off if people concerned themselves less on what they *can* earn and more on what they need to earn and about the benefit of their teammates and, if you're in management, the benefit of the company as a whole. Employees that feel valued -- really valued, not that "employees are our most valuable asset" bullshit -- and secure are often better employees as they have less to fear and worry about.
I will be writing Dan an actual snail-mail letter commending him on his actions and wishing him the best.
Remember Sue...
It must have been something you assimilated. . . .
Well with regard to point 2, I don't see why these guys just move to a lower cost area. Every time I mention it to them, they babble something like they have the "right" to live there. For reference, $1094 a month's rent gets me:
1) 1 bedroom, 1 bathroom, living room, big kitchen, total 781 square feet, single floor unit and located on the first floor.
2) Two very large swimming pools (one of them has a beach style entry and sand pits) spa, gas powered grills that are free to use, cabanas, outdoor TVs.
3) Gated community, with a unique gate code per unit, and a remote for the gate so no reason to stop and reach for the number pad when you drive in
4) Trash butler who comes to my front porch and picks up my trash
5) Keyless entry to the pools (uses an NFC fob)
6) Same day service when I something breaks (for example, I called to complain that my AC was too loud, and somebody fixed it a few hours later. Dishwasher wasn't working, fixed the next morning.)
7) Fiber internet (max tier is gig)
8) Total cost for electricity and gas ends up being another $110 a month during the summer. Since this is in Arizona, heating costs are minimal during the winter.
9) Fitness center, with free gym classes.
10) Nice mountain view, and lots of nice places to eat and shop are within walking distance.
And yes, the figure I quoted above includes all of the amenities and taxes. At the start of the month, that's the exact amount I pay.
Tell me how much something like that costs in San Francisco or New York.