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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: 1) by nitehawk214 on Tuesday August 04 2015, @09:28PM
It does if the company has a fixed poll of dollars for raises. I was flat-out told by two former bosses at two companies that they would love to give me a higher raise, but they wanted to give at least x dollars to the entire time, and corporate only gave y thousand dollars for raises for the entire team. (Don't recall what x was, but my raise ended up being pretty terrible.)
I told him "No problem, boss. If I am unhappy with my pay, I will let you know. With a 2 weeks notice." I followed right the hell through with that about a year later. At a huge giant evil company it does you no good to tell them early that you are looking to leave, and it gives them the excuse to fire you or make your job an even more unreasonable hell than it already is.
At 100 employees I don't know if Gravity Payments is into the "huge evil company" and the articles do a nice job of dancing around whether or not raises were from a fixed pool, but it is kind of a necessity for a small company. There are only so many dollars to go around. Why stick around if you know you won't be getting a decent raise ever again?
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 1) by nitehawk214 on Tuesday August 04 2015, @09:28PM
That is "fixed pool"
The funny thing is I originally typoed it as "fixed pull", then manage to correct it wrong.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 0) by Anonymous Coward on Tuesday August 04 2015, @10:13PM
> Why stick around if you know you won't be getting a decent raise ever again?
You seem to be commingling two independent concepts:
(1) The ability to find a higher paying job somewhere else
(2) The company's compensation policies
With respect to (1) - people have been leaving their job for greener pastures since the invention of employment, the fact that someone can find a better paying job just means they were previously underpaid, nothing more.
With respect to (2) - compensation is rarely so linear - would you leave if the CEO got a $10M bonus? Regardless of specifics, the only real limit on total employee compensation is revenue. If this high minimum policy produces a disproportionately large increase in revenue, would that still make you feel justified in quitting?