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.
Imagine that.
Differences in pay exist for a reason: Because different people perform functions of different value to the company.
Wait, so great employees don't like making the same as their mediocre colleagues?! Get the #*@! out of here!
Most linux users don't know this, but the man pages were named after Chuck Norris. Chuck Norris fsck'ing hates noobs!
This sounds like something out of an Ayn Rand novel. It's very similar to something that happens in Atlas Shrugged.
Same thing happened at walmart when they bumped their lowest paid workers up to the minimum wage.
http://business.financialpost.com/news/retail-marketing/wal-marts-pay-raise-creates-thousands-of-unhappy-workers-its-pitting-people-against-each-other
Senior workers got no raise and feel disrespected.
None of them can see the clouds; The polished wings don't care.
I've seen minimum wage go up by 40% since I entered the work force, but my own salary has only gone up by 25% in that same period.
You know that the minimum wage hasn't kept up with inflation in over two decades, right? So if your wages are doing even more poorly than the minimum wage, you're getting fucked and hard. But you're complaining about the people who are getting fucked way harder than you, because them getting fucked slightly less hard means you get fucked slightly harder. What about the people doing the fucking? Maybe you should stop attacking your natural allies.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
But you don't understand! it's absolutely unfair that Timmy had 3 marbles and got 3 more, and he had 10 marbles and only got 2 more! ITS NOT FAIR!!1! He demands at least 4 marbles or he's going to flip his shit and go full on ballistic temper tantrum followed by pouting for the rest of the afternoon!
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"
Emphasis mine. The NIR Act established the first minimum wage in America (this was struck down in 1935, ruled unconstitutional by the SC, but a subsequent Act establishing a minimum wage was upheld by the SC in 1941, under that magical Commerce Clause.)
Granted, he doesn't say the family size that decent living would support, but lacking statements to the contrary I assume at least a three-person household. But a temp wage? No, that does not appear to be the intention of it. Big business and our government has twisted and contorted it over the decades to be just a minimum wage paid to people... but if it can't cover life's basics, then what is the point of it at all?
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.
Those who can contribute significant, above-and-beyond value naturally feel that people should be rewarded in proportion to their contributions.
Those who cannot contribute significant, above-and-beyond value naturally feel that everyone should receive equal rewards, regardless of their contributions.
By setting policies that pander to the second group, you wind up losing members of the first group, resulting in a company full of under-performing slackers. No surprise such a company doesn't do well.