Gravity Payments CEO cuts his $1mil salary to $70k to pay employees same.

Ramblings
121

[quote=“9erken, post:118, topic:29556”]It’s actually pretty easy to downsize if you get stuck in a lower salary. No one wants to do it, which is why people end up in foreclosure when housing markets aren’t collapsing like they did a few years ago. But it is certainly possible as long as you are willing to adjust your lifestyle. I don’t find that to be a credible reason for keeping wages lower in one company just because comparable companies are lower. Otherwise, you are just setting up yet another factor pushing wages lower and lower (among the many other downward pressures on wages, like foreign workers, rules against collective bargaining, stockholder demands, etc.).

NWA, if you are saying some financial education provided by the employer, then I agree that’s a good idea. But that’s probably good in any case, plenty of people stuck in low wage jobs go into deep debt too, even if it’s not a recent shift.[/quote]

Always a good idea - but if I as the CEO know that I am paying my employees above what their skillset is worth on the open market then I think I have the responsibility to inform the workforce of how far out of line their salary is vs. their skillset and providing additional opportunities to the employee base to grow their skills. The indirect impact of paying someone more than they are actually worth can be great. The workforce just needs a straight answer and opportunity. I would have said rather than pay them 70k they should have paid 60K with 10k earmarked for education or something like that. Don’t just give them the money, give them more abilities to make more money.

122

[quote=“NinerWupAss, post:121, topic:29556”][quote=“9erken, post:118, topic:29556”]It’s actually pretty easy to downsize if you get stuck in a lower salary. No one wants to do it, which is why people end up in foreclosure when housing markets aren’t collapsing like they did a few years ago. But it is certainly possible as long as you are willing to adjust your lifestyle. I don’t find that to be a credible reason for keeping wages lower in one company just because comparable companies are lower. Otherwise, you are just setting up yet another factor pushing wages lower and lower (among the many other downward pressures on wages, like foreign workers, rules against collective bargaining, stockholder demands, etc.).

NWA, if you are saying some financial education provided by the employer, then I agree that’s a good idea. But that’s probably good in any case, plenty of people stuck in low wage jobs go into deep debt too, even if it’s not a recent shift.[/quote]

Always a good idea - but if I as the CEO know that I am paying my employees above what their skillset is worth on the open market then I think I have the responsibility to inform the workforce of how far out of line their salary is vs. their skillset and providing additional opportunities to the employee base to grow their skills. The indirect impact of paying someone more than they are actually worth can be great. The workforce just needs a straight answer and opportunity. I would have said rather than pay them 70k they should have paid 60K with 10k earmarked for education or something like that. Don’t just give them the money, give them more abilities to make more money.[/quote]

The problem is, the “market” is a race to the bottom.

123

[quote=“NinerWupAss, post:121, topic:29556”][quote=“9erken, post:118, topic:29556”]It’s actually pretty easy to downsize if you get stuck in a lower salary. No one wants to do it, which is why people end up in foreclosure when housing markets aren’t collapsing like they did a few years ago. But it is certainly possible as long as you are willing to adjust your lifestyle. I don’t find that to be a credible reason for keeping wages lower in one company just because comparable companies are lower. Otherwise, you are just setting up yet another factor pushing wages lower and lower (among the many other downward pressures on wages, like foreign workers, rules against collective bargaining, stockholder demands, etc.).

NWA, if you are saying some financial education provided by the employer, then I agree that’s a good idea. But that’s probably good in any case, plenty of people stuck in low wage jobs go into deep debt too, even if it’s not a recent shift.[/quote]

Always a good idea - but if I as the CEO know that I am paying my employees above what their skillset is worth on the open market then I think I have the responsibility to inform the workforce of how far out of line their salary is vs. their skillset and providing additional opportunities to the employee base to grow their skills. The indirect impact of paying someone more than they are actually worth can be great. The workforce just needs a straight answer and opportunity. I would have said rather than pay them 70k they should have paid 60K with 10k earmarked for education or something like that. Don’t just give them the money, give them more abilities to make more money.[/quote]

Some of you might be over valuing skill set pay value. Unless it’s a military or government job, your skill set pay value is whatever you get someone to pay you. It’s kind of like the value of your house. You might think your house is $200,000 based on amenities, location and square footage. But if it sells for $180,000, the value of you home is $180,000.

Hiring new employees is a crap shoot most of the time. You can do as much due diligence as possible. But you won’t know the result until the person actually starts to do the job. I’ve seen more people hired due to connections, contacts, school affiliation, interview performance, recommendations, and timing, than I have seen hired because of their actual “value”.

124

Are you really arguing that we shouldn’t pay people more because they may get laid off in the future and won’t make as much in a different job?

No, you missed my point. I was saying that if you pay a secretary $70K and they increase their standard of living based on that pay, get laid off and discover their skill set can only earn them $35K, then they may struggle. I think a better solution would be to increase pay based on performance and skill set.

125

[quote=“CPA_Niner, post:124, topic:29556”]Are you really arguing that we shouldn’t pay people more because they may get laid off in the future and won’t make as much in a different job?

No, you missed my point. I was saying that if you pay a secretary $70K and they increase their standard of living based on that pay, get laid off and discover their skill set can only earn them $35K, then they may struggle. I think a better solution would be to increase pay based on performance and skill set.[/quote]

No, I don’t think I missed your point at all, you are in fact arguing that we shouldn’t pay people more because they obviously aren’t capable of handling a higher paycheck.

It’s an admirable idea that you want to increase pay based on performance and skill set, but yet we live in a time where we are more productive than ever, but wages haven’t followed the same pattern.

126

[quote=“CPA_Niner, post:124, topic:29556”]Are you really arguing that we shouldn’t pay people more because they may get laid off in the future and won’t make as much in a different job?

No, you missed my point. I was saying that if you pay a secretary $70K and they increase their standard of living based on that pay, get laid off and discover their skill set can only earn them $35K, then they may struggle. I think a better solution would be to increase pay based on performance and skill set. [/quote]That’s a fine solution and would probably be the better option here, but how to you increase the pay of performance for someone like a secretary or a customer service rep based on performance or skillset?

Those aren’t really jobs that you develop your skillset for. A secretary falls under the expense category. Even if they are the best secretary on the planet, you’re not really improving the bottom line.

Also, lots of businesses don’t even bother to increase pay based on performance and skillset, or production beyond maybe the occasional minimal amount to make workers feel like they’re appreciated. The average worker today is way more productive than workers of years past, but worker wages are rising slower than ever and have been virtually flat for years.

127

Are cost of living adjustments not normal anymore? This year I was told “we don’t do those”. There are 4 people, including me, that have same title and responsibility. Two of us do 1.5-2 times the work every month. And could probably do more. Raising the floor does not get rid of that problem. The workload/responsibility to me is a much bigger issue and why I like Google’s pay structure.

128

[quote=“Niner National, post:126, topic:29556”][quote=“CPA_Niner, post:124, topic:29556”]Are you really arguing that we shouldn’t pay people more because they may get laid off in the future and won’t make as much in a different job?

No, you missed my point. I was saying that if you pay a secretary $70K and they increase their standard of living based on that pay, get laid off and discover their skill set can only earn them $35K, then they may struggle. I think a better solution would be to increase pay based on performance and skill set. [/quote]

That’s a fine solution and would probably be the better option here, but how to you increase the pay of performance for someone like a secretary or a customer service rep based on performance or skillset?[/quote]

As a former manager I would say its pretty darn easy. You just need to have the base level expectations for the job and the data or metrics to measure against. I did it for a few years and its not hard. The bigger challenge is the pool of money you are given as a manager to use for merits and bonuses.

129

Remember how annoyed this board was when Alan Major got an extension - when we were paying more than his skill set deserved? Well, this is basically the same thing and will likely get this same result.

You know everybody wants to feel good for the employees, but remember the CEO could have taken that money and simply reduced the prices he charged to his customers. My guess is that after the publicity of this wears off in a few weeks a lot of his customers are going to start demanding he cut their costs - and I wonder how well that will go.

Except that the CEO owns much of the company, so at least he is using his own dollars to do it.

130

Well, this will piss you off even more.

131

That’s awesome. Good to see it’s for dads too. Not sure I would take the full yearor even 6 months though.

132

[quote=“J Felt, post:125, topic:29556”][quote=“CPA_Niner, post:124, topic:29556”]Are you really arguing that we shouldn’t pay people more because they may get laid off in the future and won’t make as much in a different job?

No, you missed my point. I was saying that if you pay a secretary $70K and they increase their standard of living based on that pay, get laid off and discover their skill set can only earn them $35K, then they may struggle. I think a better solution would be to increase pay based on performance and skill set.[/quote]

No, I don’t think I missed your point at all, you are in fact arguing that we shouldn’t pay people more because they obviously aren’t capable of handling a higher paycheck.

It’s an admirable idea that you want to increase pay based on performance and skill set, but yet we live in a time where we are more productive than ever, but wages haven’t followed the same pattern.[/quote]

No, you are misinterpreting what I wrote. I stated if the person increases their standard of living, I did not say they would squander their money. You can increase your standard of living and maintain a budget but if you lose your job and you are unable to find a comparable paying job you may struggle to pay your bills.

You state it’s admirable to pay based on performance and skill set but yet that is not what Gravity is doing, so what are you supporting?

133

[quote=“NinerAdvocate, post:130, topic:29556”]Well, this will piss you off even more.

http://time.com/3984870/netflix-parental-leave/[/quote]

I like it. I also like that they are treating men and women equal with regards to time with a new child. Since we have hit a time in society where biology is not the defining factor for decisions and gender then men should absolutely be given the same opportunity.

134

That’s nice in theory, but that really puts a strain on your co-workers. Odds are a new FTE isn’t going to be created to cover the gap, it falls on your co-workers…

135

[quote=“NinerWupAss, post:133, topic:29556”][quote=“NinerAdvocate, post:130, topic:29556”]Well, this will piss you off even more.

http://time.com/3984870/netflix-parental-leave/[/quote]

I like it. I also like that they are treating men and women equal with regards to time with a new child. Since we have hit a time in society where biology is not the defining factor for decisions and gender then men should absolutely be given the same opportunity.[/quote]My company gives both men and women leave time for a child, but only 6 weeks. A year would be awesome.

136

Yep, also I know this sounds terrible, but after the week off I had I was kind of ready to get back to the office.

137

[quote=“NinerAdvocate, post:130, topic:29556”]Well, this will piss you off even more.

http://time.com/3984870/netflix-parental-leave/[/quote]

I have been paying attention to articles on companies offering unlimited vacation time and it looks like it make take a few more years to see if the culture catches up to the rules, but early results seem to be that people take less vacation. Maybe it is because we do not want to admit that we can be gone an unlimited amount of time and not be missed. I don’t know. I am sure that if my company ever offers this that last year before retirement is going to be a good one.

138

I felt the same way VA. I took a week off, but couldn’t imagine taking more than 2, except as spot relief for family helping my wife through the early months.

There will always be people who abuse situations like this, but most won’t. In my mind, it’s a cost/benefit analysis, and B’s > C’s.

139

Yep, also I know this sounds terrible, but after the week off I had I was kind of ready to get back to the office.[/quote]

Which you can still do with this policy.

140

Fine print would be good to know on Netflix. I know many people that sit out their maternity leave then don’t come back. Also, asking “is your wife pregnant?” is not a legal interview question.

So I’m curious what the limits are before you can take this on and what the work requirements after are.