Call it a failed Socialist experiment

[SunsetBengal]

Things not working out so well, for the Seattle CEO that raised the minimum salary in his company to 70K.

http://dailycaller.com/2015/08/02/ceo-who-raised-minimum-salary-to-70k-falls-on-hard-times/


[quoPrice has had to rent out his own house to help cover his bills. In addition, the New York Times reports Gravity lost two of its most valuable employees whose departure was “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.”

Read more: http://dailycaller.com/2015/08/02/ceo-who-raised-minimum-salary-to-70k-falls-on-hard-times/#ixzz3hmBLEQhU
te][/quote]

[GMDino]

(08-03-2015, 03:00 PM)SunsetBengal Wrote: Things not working out so well, for the Seattle CEO that raised the minimum salary in his company to 70K.

http://dailycaller.com/2015/08/02/ceo-who-raised-minimum-salary-to-70k-falls-on-hard-times/


[quoPrice has had to rent out his own house to help cover his bills. In addition, the New York Times reports Gravity lost two of its most valuable employees whose departure was “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.”

Read more: http://dailycaller.com/2015/08/02/ceo-who-raised-minimum-salary-to-70k-falls-on-hard-times/#ixzz3hmBLEQhU
te]

[/quote]

I was reading about this.  I don't think two employees quitting is "failing".  And he's gathered new customers to replace the ones they lost.

For a more in depth look there's this:
http://www.nytimes.com/2015/08/02/business/a-company-copes-with-backlash-against-the-raise-that-roared.html?_r=0



One of the employees who quit admitted to being burned out and the other wanted to move on eventually anyway.

The raises are being brought up gradually too.

I guess the higher pay people being upset with lower paid making more money makes sense, but it didn't take anything away from the higher paid people.  I suppose its a status thing?  They felt they weren't being appreciated enough?

Anyway, time will tell. 

I think he went overboard with the amount he set, but its his company and he has to decide if he can afford it or not and I'm glad he at least looked at it and is trying to raise everyone.

[Benton]

a— Not really a Socialist experiment. It's a business management experiment, namely, does increasing lower employee pay translate into upper level profits? It's an interesting idea, and one that would be interesting at a company where the CEO was a better guage of how much his company can afford in short-term expense.
b— Renting out his house and the lawsuit seem to be more about his brother and company co-founder settling a grudge. It was bad business on Price's part not to include a nest egg large enough to handle a rainy day, but that doesn't really have anything to do with the wage, which isn't up to $70k yet.
c— It hasn't really had much time to see if it worked or not, but...

Quote:The publicity surrounding the wage policy has generated benefits. Three months before the announcement, the firm had been adding 200 clients a month. In June, 350 signed up. That new business won’t start paying off for 12 to 18 months, however, Price said, and in the meantime, he is contending with the lawsuit brought by his brother. Lucas Price owns about 30 percent of their company, although he has not been involved in day-to-day operations for several years.

http://www.seattletimes.com/seattle-news/seattle-company-copes-with-backlash-on-70000-minimum-wage/

d— Maybe we need a few more people to do the same before it starts to work. Also from the same link:

Quote:There have been other ripples. Mario Zahariev, who runs Pop’s Pizza & Pasta, switched to Gravity after seeing Price on the news. When he learned his monthly processing fees would drop to $900 from $1,700, Zahariev decided: “I was not going to keep the difference for myself.” He used the savings to raise the salaries of his eight employees.

[GodHatesBengals]

So a private business owner making his own decision on how he wants to pay his employees is "a socialist experiment"?

Brilliant.

[6andcounting]

(08-03-2015, 03:33 PM)GMDino Wrote: I guess the higher pay people being upset with lower paid making more money makes sense, but it didn't take anything away from the higher paid people.  I suppose its a status thing?  They felt they weren't being appreciated enough?


I think he went overboard with the amount he set, but its his company and he has to decide if he can afford it or not and I'm glad he at least looked at it and is trying to raise everyone.

If someone is working a job that can be expected to pay 70k a year and that's what they are getting, no complaints.

But if someone else starts getting paid 70k for a job that normally pays 50k a year, the first person feels like they are getting underpaid since their pay is the going rate while others are making way more than their going rate.

[GMDino]

(08-03-2015, 04:41 PM)6andcounting Wrote: If someone is working a job that can be expected to pay 70k a year and that's what they are getting, no complaints.

But if someone else starts getting paid 70k for a job that normally pays 50k a year, the first person feels like they are getting underpaid since their pay is the going rate while others are making way more than their going rate.

But its still all relative.  Just because you make more than the next guy doesn't mean that at some point you won't make the same.  You might have maxed out and the other employee is still working their way up.

And, again, the two that quit mentioned the pay but also had other reasons so the money wasn't the main issue.

[Rotobeast]

(08-03-2015, 04:41 PM)6andcounting Wrote: If someone is working a job that can be expected to pay 70k a year and that's what they are getting, no complaints.

But if someone else starts getting paid 70k for a job that normally pays 50k a year, the first person feels like they are getting underpaid since their pay is the going rate while others are making way more than their going rate.

Really makes you think of players in the NFL wanting a bigger payday, because so and so got a little bit closer to what they were making or exceeded it.
 

[StLucieBengal]

What is interesting is that we have people clamoring that if everyone made the same then all would be great in the world. Using that income difference as what seperated the wheat from the Chaff .. What I find funny is that when someone does this the others who have put in their time and earned some skins on the wall get upset because now others don't have to put in their time.

Humans are always competitive and will never be able to live in a world where everyone has the same. No matter what human always want more than everyone else.

[Belsnickel]

(08-03-2015, 05:20 PM)StLucieBengal Wrote: Humans are always competitive and will never be able to live in a world where everyone has the same. No matter what human always want more than everyone else.

Not all. I get that it is pretty engrained for a lot of people, but not everyone feels that way. I'd be perfectly fine with just making enough to not have to worry about losing a roof over my head, where my next meal is coming from, my utilities being shut off, and that I'm not going around nude. If we had a decent public transportation system, I would go without a car even (provided I was living in the city, something cheap and reliable if I was out in the sticks like I would prefer).

There are a lot of people that take that attitude out there as well. Just not enough to really make a difference.

[*michaelsean*]

If you pay everyone the same thing no matter what the job description, you will eventually fail. People will think I can make the same amount doing A as I make doing B without all the stress of doing B? I think I'll do A.

[6andcounting]

(08-03-2015, 04:55 PM)Rotobeast Wrote: Really makes you think of players in the NFL wanting a bigger payday, because so and so got a little bit closer to what they were making or exceeded it.
 

#JoeFlacco #RussellWilson

[RoyleRedlegs]

Socialist? I dunno bout that...but it is a god awful business model

[StLucieBengal]

(08-03-2015, 05:30 PM)Belsnickel Wrote: Not all. I get that it is pretty engrained for a lot of people, but not everyone feels that way. I'd be perfectly fine with just making enough to not have to worry about losing a roof over my head, where my next meal is coming from, my utilities being shut off, and that I'm not going around nude. If we had a decent public transportation system, I would go without a car even (provided I was living in the city, something cheap and reliable if I was out in the sticks like I would prefer).

There are a lot of people that take that attitude out there as well. Just not enough to really make a difference.

Yeah I could probably handle living that way as well. But I will tell you if I had to live that way, I would not work the amount I work now . I would work to the level of that lifestlye.

[BmorePat87]

Sounds like his problems are more than just paying these people a lot of money. If you cannot manage your own bills based on a salary you set for yourself, and your cofounder brother is suing you, you're probably doing some other things wrong. Also, I'm reading that the pay increases would take effect in April and occur over a 3 year period. So I don't know if the company would be falling apart 4 months into a 3 year plan.


But, I agree with others who said they were confused about what was socialist about this.

[SunsetBengal]

(08-03-2015, 05:20 PM)StLucieBengal Wrote: What is interesting is that we have people clamoring that if everyone made the same then all would be great in the world.   Using that income difference as what seperated the wheat from the Chaff ..   What I find funny is that when someone does this the others who have put in their time and earned some skins on the wall get upset because now others don't have to put in their time.    

Humans are always competitive and will never be able to live in a world where everyone has the same.    No matter what human always want more than everyone else.

Yes, I could see my senior coworkers being rather chapped if I were to be raised up to what they make.

Assuming that I pass the PLS exam on my first attempt, I would expect to get a nice raise to somewhere between 55-60K.  That is fair wage for a new PLS.  The senior Survey Mgr. in the firm I work for makes about 120K, but he has been a PLS for 31 years, and has 38 total years experience in the field.  He literally lives and breathes his profession.  If I were to be paid the same as he, as an entry level PLS, I'm sure that he would quit.  He may not say up front that the money was the motivating reason, but I know him well enough to know that any "stated" reasons would just be a cover for his true feelings.  And, I wouldn't blame him.

[Belsnickel]

(08-03-2015, 05:39 PM)michaelsean Wrote: If you pay everyone the same thing no matter what the job description, you will eventually fail. People will think I can make the same amount doing A as I make doing B without all the stress of doing B? I think I'll do A.

(08-03-2015, 05:51 PM)StLucieBengal Wrote: Yeah I could probably handle living that way as well. But I will tell you if I had to live that way, I would not work the amount I work now . I would work to the level of that lifestlye.

Interestingly enough, studies have shown this not to be true for the majority. Monetary incentives are not the drivers that many people think they are. Giving someone a higher level of ownership in the project, product, what have you has shown in studies to be a better motivator and resulting in higher performance than monetary incentives. On the surface it seems like the no brainer situation, but deeper down it isn't. So much so that we don't often realize it about ourselves. This is becoming more of a thing with the Millennial generation. A common theme among them is that they are more concerned about personal fulfillment than monetary gain in their careers.

Obviously there are those that buck the trend and these sorts of studies are hogwash to those in the hard sciences, but it's just some food for thought on this.

[StLucieBengal]

(08-03-2015, 06:14 PM)Belsnickel Wrote: Interestingly enough, studies have shown this not to be true for the majority. Monetary incentives are not the drivers that many people think they are. Giving someone a higher level of ownership in the project, product, what have you has shown in studies to be a better motivator and resulting in higher performance than monetary incentives. On the surface it seems like the no brainer situation, but deeper down it isn't. So much so that we don't often realize it about ourselves. This is becoming more of a thing with the Millennial generation. I common theme among them is that they are more concerned about personal fulfillment than monetary gain in their careers.

Obviously there are those that buck the trend and these sorts of studies are hogwash to those in the hard sciences, but it's just some food for thought on this.

Millennials may want personal fulfillment.  But they also want all their gadgets and gizmo's.  And until those are free.   They will still care about their income.

I also want to be fulfilled. But when I look at how much things cost then I start working more.

[Benton]

(08-03-2015, 05:39 PM)michaelsean Wrote: If you pay everyone the same thing no matter what the job description, you will eventually fail.  People will think I can make the same amount doing A as I make doing B without all the stress of doing B? I think I'll do A.

To the bold, eh, no. No one, including Price, is suggesting that. He's suggesting paying the lowest skilled employees more. That doesn't mean they're unskilled, just that they're the lowest pad.

To the rest, no. As Matt has already mentioned, giving employees some ownership proves to be a greater motivator. To draw an example from a real world application, I work a lot with graphic designers. It took advice from some guys smarter than me before I finally realized the best way to get the best results from them was to just give them a very loose idea of what I wanted. That way, they had some control over where their assignment went, some ownership of the project. 

If you want to get the best out of people, hire good people and let them be who you hired. If you hire people and think they're only worth the bare minimum, then you're hiring all wrong. 

[Benton]

(08-03-2015, 06:18 PM)StLucieBengal Wrote: Millennials may want personal fulfillment.  But they also want all their gadgets and gizmo's.  And until those are free.   They will still care about their income.

I also want to be fulfilled.  But when I look at how much things cost then I start working more.

Whu?

[StLucieBengal]

(08-04-2015, 12:29 AM)Benton Wrote: Whu?

Pay matters. And if your better than the other people you work with then you better make more.

That is the same for any generation.