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Earlier this year, Seattle-based Gravity Payments CEO Dan Price announced he was setting the minimum wage for his workers at $70k. About 70 of the company's 120 employees would be receiving the raises over a 3 year period and Price cut his salary from $1m to $70k to make the change happen. His reasoning: He read an article that more money for people who make less than $70k leads to increased happiness.
His plan may have backfired:
What few outsiders realised, however, was how much turmoil all the hoopla was causing at the company itself. To begin with, Gravity was simply unprepared for the onslaught of emails, Facebook posts and phone calls. The attention was thrilling, but it was also exhausting and distracting. And with so many eyes focused on the firm, some hoping to witness failure, the pressure has been intense.
More troubling, a few customers, dismayed by what they viewed as a political statement, withdrew their business. Others, anticipating a fee increase - despite repeated assurances to the contrary - also left. While dozens of new clients, inspired by Price's announcement, were signing up, those accounts will not start paying off for at least another year. To handle the flood, he has had to hire a dozen additional employees - now at a significantly higher cost - and is struggling to figure out whether more are needed without knowing for certain how long the bonanza will last.
Two of Price's most valued employees quit, spurred in part by their view that it was unfair to double the pay of some new hires while the longest-serving staff members got small or no raises. Some friends and associates in Seattle's close-knit entrepreneurial network were also piqued that Price's action made them look stingy in front of their own employees.
To make matters worse, Price's brother and company co-founder Lucas filed a lawsuit less than 2 weeks after the raise increase announcement, accusing his brother of violating his rights as a minority shareholder.
(Score: 4, Informative) by dr zim on Tuesday August 04 2015, @06:15PM
You guys know that it's the 'Moral' of the story, not the Morale, right?
(Score: 0) by Anonymous Coward on Tuesday August 04 2015, @08:46PM
> You guys know that it's the 'Moral' of the story, not the Morale, right?
Seems to me that this story is all about employee morale.
(Score: 1) by Conver on Tuesday August 04 2015, @09:57PM
Teetering on the brink of trolling as I am, may I step back from the abyss and offer my loot of the wisdom and wit of the late John Kenneth Galbraith?
In any great organization it is far, far safer to be wrong with the majority than to be right alone.
-John Kenneth Galbraith
I think this is a rhetorical post, is it not?
(Score: 2, Funny) by dr zim on Monday August 10 2015, @02:08PM
The whole then/than thing is just too emotionally packed for me. I just skip right over either word and pretend they don't exist.
I can't fix everything, you know.