8 years ago
3
A Company Copes With Backlash Against the Raise That Roared
There are times when Dan Price feels as if he stumbled into the middle of the street with a flag and found himself at the head of a parade. Three months ago, Mr. Price, 31, announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. He wasn’t thinking about the current political clamor over low wages or the growing gap between rich and poor, he said.
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Interesting article. He doesn't really hide that this was a PR move, and I think a lot of the problems are a result of the flashy way it was implemented. Worth reading just for some of the ridiculous reaction quotes:
Yeah, that's not how capitalism works.
The employees themselves had a good counterpoint: "Am I doing my job well enough to deserve this?"
There are incentives in both directions, with poor performers still receiving raises and hard workers wondering if they should work harder to earn the extra money. In the end, management style and a larger applicant pool might have more effect than the actual raise on worker motivation. I've seen the same conflicts discussed in the article (pay varies little with performance, who "deserves" a raise, etc.) among people being paid less than $10/hr, so I suspect the issue has more to do with cultural expectations and the way management handles poor performers.
There's a few things that frustrate me reading the article. The biggest, and first, was that clients are leaving his business because they "fear fee hikes." That seems, to me, to be a thinly veiled excuse for political reasons. If it was the real reason, why wouldn't they wait until those fee changes were actually announced?
The other one is the "family business" stuff. I'm pretty firmly against working with family, for precisely the reasons Price (the business owner) is seeing. One of my pet peeves is the inherent nepotism involved with having a family member as a coworker (or worse, your spouse). That said, none of my family is in even a remotely similar field, so maybe I would feel differently if they were.