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Post by jeremysgirl on Apr 16, 2015 17:54:40 GMT
Did anyone read about this? I read this article yesterday: USA Today This businessman is lowering his CEO salary to $70,000 annually and is raising up his employees to the point where they make $70,000 minimum. So I read this and I think, "what a great idea." I am left thinking he's very generous and his employees are very lucky to have him as a boss. Then this morning, I see someone on facebook has posted a link to this article from the Federalist Papers which basically says it is setting up his employees for failure and will be keeping them in jobs that are normally low wage instead of providing them with incentive to strive for more. It also stated that by using up profits to pay more, the business will not grow. I just wondered what the political peas thought about this. |
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georgiapea
Drama Llama
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Post by georgiapea on Apr 16, 2015 18:16:33 GMT
Why does everyone need to "strive for more"? What about the theory that all jobs are valuable?
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Deleted
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Post by Deleted on Apr 16, 2015 18:18:58 GMT
Did anyone read about this? I read this article yesterday: USA Today This businessman is lowering his CEO salary to $70,000 annually and is raising up his employees to the point where they make $70,000 minimum. So I read this and I think, "what a great idea." I am left thinking he's very generous and his employees are very lucky to have him as a boss. Then this morning, I see someone on facebook has posted a link to this article from the Federalist Papers which basically says it is setting up his employees for failure and will be keeping them in jobs that are normally low wage instead of providing them with incentive to strive for more. It also stated that by using up profits to pay more, the business will not grow. I just wondered what the political peas thought about this. Someone will always gripe and moan, no matter what. He seems like a smart leader...I'm betting he will find a way to overcome the naysayers. |
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Post by jeremysgirl on Apr 16, 2015 18:21:42 GMT
Why does everyone need to "strive for more"? What about the theory that all jobs are valuable? That's what I was thinking. Not everyone wants to or has the ability climb a corporate ladder. Some people just want a decent wage for their hard days work. |
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Nink
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Post by Nink on Apr 16, 2015 18:32:46 GMT
Pay me $70,000 a year and I'll be perfectly happy to just sit in my little office and continue to do what I'm doing without "striving for more". There's got to be a party pooper in every bunch.
I'd be willing to bet his employees will be very productive for him and he'll have a low turnover rate and his business WILL grow.
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Deleted
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Post by Deleted on Apr 16, 2015 18:33:08 GMT
You know for many people they don't need more than that. It is a very comfortable wage. I don't get the whole argument at all. Sounds like sour grapes honestly. Especially when so many companies don't even pay a living wage.
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loco coco
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Post by loco coco on Apr 16, 2015 18:37:04 GMT
i think the employees will strive to do their very best now bc they feel grateful and respected. A good company morale can go a long way
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Post by Yubon Peatlejuice on Apr 16, 2015 18:41:18 GMT
I saw this on the nightly news and they interviewed many of his workers. They were all dressed in jeans and t-shirts and looked to be in their early 20's. One guy talked about finally being able to move out of his mom's house.
I got the feeling that every one of them would be happy making that 70k per year for life.
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Deleted
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Post by Deleted on Apr 16, 2015 18:41:55 GMT
I think the article is ridiculous. I think those employees will be loyal to the company and work their asses off because they appreciate being at a company that values them in such a tangible way.
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keithurbanlovinpea
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Flowing with the go...
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Post by keithurbanlovinpea on Apr 16, 2015 18:42:05 GMT
He plans to raise his salary once the business revenue goes back up (or sales or something) so he has incentive to make it grow.
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Post by jeremysgirl on Apr 16, 2015 18:42:47 GMT
Sounds like sour grapes honestly. This is exactly what I was thinking. I tend toward the conservative side politically, but I could not see any disadvantage to doing something like this and I could see the many advantages to paying your employees well. I was actually hoping someone more conservative than me would come in here and expand on the argument the Federalist Papers made so I could understand it more. |
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Post by mzza111 on Apr 16, 2015 18:50:44 GMT
Why does everyone need to "strive for more"? What about the theory that all jobs are valuable? That's what I was thinking. Not everyone wants to or has the ability climb a corporate ladder. Some people just want a decent wage for their hard days work. I used to think that I wanted to "climb the corporate ladder" but to be honest, the older I get the more I want a "life". I don't want to work 12 hour days and weekends. I like working 40 hours a week. I'll work the occasional overtime when needed but I don't want to do it on a regular basis. I also think some in management work so many hours that when you do the math, they actually make as much as I do. |
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Post by Deleted on Apr 16, 2015 18:51:52 GMT
Coming from an HR background I can see where the go-getter that works his butt off may get a little irritated that the person answering the phones is making the same as him. Will the employees get raises after this or are they are $70K forever?
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Post by cbet on Apr 16, 2015 19:00:07 GMT
Coming from an HR background I can see where the go-getter that works his butt off may get a little irritated that the person answering the phones is making the same as him. Will the employees get raises after this or are they are $70K forever? Seriously? Part of my job is "answering the phones" and I'm glad that I work for a place that recognizes that the phones are not a job that just anyone can do (at least not well) and is willing to pay something for that skill. A go-getter that has any people skills should realize that the support staff in the office can make his/her work life much easier, or they can make it a living hell. I've worked jobs where the support staff was treated like 2nd class citizens, and the good ones didn't stay for long before moving on to something where they were appreciated. Which is why I think this story is awesome. This is the head guy saying "I think my employees deserve to make more money, and I am willing to cut my own pay to make it happen." Instead of the annual speech of "how much we appreciate you, but no raises this year", or thinking that a gift on Administrative Professional's day makes up for crappy pay and working conditions the rest of the year. |
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Post by kristi521 on Apr 16, 2015 19:06:08 GMT
Coming from an HR background I can see where the go-getter that works his butt off may get a little irritated that the person answering the phones is making the same as him. Will the employees get raises after this or are they are $70K forever? Seriously? Part of my job is "answering the phones" and I'm glad that I work for a place that recognizes that the phones are not a job that just anyone can do (at least not well) and is willing to pay something for that skill. A go-getter that has any people skills should realize that the support staff in the office can make his/her work life much easier, or they can make it a living hell. I've worked jobs where the support staff was treated like 2nd class citizens, and the good ones didn't stay for long before moving on to something where they were appreciated. Which is why I think this story is awesome. This is the head guy saying "I think my employees deserve to make more money, and I am willing to cut my own pay to make it happen." Instead of the annual speech of "how much we appreciate you, but no raises this year", or thinking that a gift on Administrative Professional's day makes up for crappy pay and working conditions the rest of the year. And I manage a team that answers the phone. You are right, it is a skill that not everyone has. Not everyone can deal with the constant business and multi-tasking. That said, there are jobs that require more skills than others. One that has a higher skill will probably be disgruntled over making the same as everyone else, that doesn't have as high of a skillset. It will be interesting to see how this all plays out. |
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Post by cbet on Apr 16, 2015 19:13:13 GMT
I took the story to mean that $70k per year was going to be the minimum wage at that company, not that it was what everyone would be making. Also, somewhere else mentioned that the $70k was going to be phased in over the course of 3 years (I think). So, you would still have the jobs that required more skill making more; probably just not as much more. And sorry about getting my back up at the phones thing  At a former job, I was the chief phone person. Every time they hired someone new, they would decide that new person would now take the phones (because "anyone can do that") and I would get new, more "important" duties. And every stinking time, about 3 weeks in, the big boss would say "we need to get new person off the phones, they are TERRIBLE". And I would get the phones back. But they never took away the new, more "important" duties. By the time I left, I was so stressed out and felt like the only way I was ever going to catch up with everything that needed to be done was to burn my desk |
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Deleted
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Post by Deleted on Apr 16, 2015 19:17:34 GMT
From an HR standpoint, I think when you make all positions have the same pay, you disincentivize anyone to want to move up. If the lowest person is making the same as say a manager, why would the lowest person ever want to be innovative, work harder or move up? He definitely is going to make a more "flat" company.
And I can honestly say I don't know a single person who worked harder after they got a large pay bump if they stayed in the same position. Maybe that is just my cyncial-ness coming through. However, I do think it will buy him some loyalty and reduced turnover of the lower level jobs because the employees won't be able to find other comparable jobs in the area once they get used to living on the inflated salary. I do have to wonder what his clients will think because in the end, I suspect some will be in favor and others will see they have to pay more for his product/service so that his employees can make more than the market value of the position.
Knowing the cost of employees (wages plus benefits plus payroll type taxes and insurance), it will be interesting to see what he ends up with at the bottom line after his pay cut and these pay increases. Will they be able to generate enough money to support it? Will he have to let some of the worst performers go because $70k is just too much for a position with a bad performer? I really wish I could actually analyze his payroll vs profits before and after. I am such a nerd!
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Post by Laurie on Apr 16, 2015 19:19:33 GMT
It seems most of the "naysayers" are questioning if it will be sustainable if the company grows. If they hire 100 employees that 20K difference (50K to 70K) becomes 2 million dollars. Are the profits there to cover the additional 2 million? I haven't read enough about the company to know whether or not this is even an issue.
I think there are a lot of things to be considered other than assuming this is a good thing because hey at least he is dropping his wage so they can make more. However, I think it is safe to assume he has taken all of this considerations into account.
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Post by LavenderLayoutLady on Apr 16, 2015 19:24:09 GMT
i think the employees will strive to do their very best now bc they feel grateful and respected. A good company morale can go a long way That's what I was thinking. And, ya know, $70,000 a year salary would be life changing money for me. Just saying. |
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Deleted
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Post by Deleted on Apr 16, 2015 19:25:15 GMT
Coming from an HR background I can see where the go-getter that works his butt off may get a little irritated that the person answering the phones is making the same as him. Will the employees get raises after this or are they are $70K forever? It's not that everyone will be making $70,000, it's that no one will be making less than $70,000 (after this is fully phased in over 3 years). There's still plenty of incentive to excel and grow and sure, earn more. |
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Post by Laurie on Apr 16, 2015 19:26:05 GMT
Luvspaper sums it up pretty well. I too would love to see the before and after of this because I just don't see how this will be sustainable. Great if it all works out though.
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Deleted
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Post by Deleted on Apr 16, 2015 19:27:10 GMT
I think when you make all positions have the same pay That is not what is happening. He is simply increasing the minimum pay at the company. |
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Post by chlerbie on Apr 16, 2015 19:27:17 GMT
"keeping them in jobs that are normally low wage"...
Well...yeah, he likely will be. But THESE jobs are not low wage at that point, so it's GREAT to keep them there.
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Deleted
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Post by Deleted on Apr 16, 2015 19:28:51 GMT
You know for many people they don't need more than that. It is a very comfortable wage. I don't get the whole argument at all. Sounds like sour grapes honestly. Especially when so many companies don't even pay a living wage. Unfortunately, here in Seattle where housing prices are going through the roof, $70,000 isn't a comfortable wage for many. Micro apartments of 200 square feet are renting for almost $1200 a month. It's insane. We live about 30 minutes outside of downtown and were hoping to move closer but won't be any time soon. |
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Post by jeremysgirl on Apr 16, 2015 19:30:00 GMT
I did not come away with the understanding that everyone would be making $70,000, but that it would be a minimum wage. If that were the case, then I would agree that this plan was not a good one because you should be able to make more money when you accept more responsibility and do a job requiring more skills.
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Post by cbet on Apr 16, 2015 19:30:47 GMT
It makes me think of the part in "It's a Wonderful Life" where George Bailey is trying to keep the Building & Loan open after his father dies - where he talks about the fact that the people who now were able to have a house were now better employees, better customers. Maybe I'm just too much a rose-colored glasses kind type, but the vibe I got from the different articles I've seen about this was that the CEO felt that he would have better employees if they were able to own homes and drive reliable vehicles and not be constantly worried about money. And it was refreshing to see one of the top guys say "I want my employees to be paid more, and I'm willing to take a pay cut to make it happen"
I would guess, though, that getting a job at that company is going to become super-competitive. And I would also guess that they are going to get some applicants for some of the less-skilled positions who would be qualified for more highly-skilled jobs at other companies, because of the pay difference.
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Post by Darcy Collins on Apr 16, 2015 19:31:00 GMT
From an HR standpoint, I think when you make all positions have the same pay, you disincentivize anyone to want to move up. If the lowest person is making the same as say a manager, why would the lowest person ever want to be innovative, work harder or move up? He definitely is going to make a more "flat" company. And I can honestly say I don't know a single person who worked harder after they got a large pay bump if they stayed in the same position. Maybe that is just my cyncial-ness coming through. However, I do think it will buy him some loyalty and reduced turnover of the lower level jobs because the employees won't be able to find other comparable jobs in the area once they get used to living on the inflated salary. I do have to wonder what his clients will think because in the end, I suspect some will be in favor and others will see they have to pay more for his product/service so that his employees can make more than the market value of the position. Knowing the cost of employees (wages plus benefits plus payroll type taxes and insurance), it will be interesting to see what he ends up with at the bottom line after his pay cut and these pay increases. Will they be able to generate enough money to support it? Will he have to let some of the worst performers go because $70k is just too much for a position with a bad performer? I really wish I could actually analyze his payroll vs profits before and after. I am such a nerd! Me too. I'm also wondering on how much free publicity he's banking on to grow the business. He's certainly not the first employer to take a drastic pay cut - I'm wondering why he didn't join the $1 club. |
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Deleted
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Post by Deleted on Apr 16, 2015 19:35:30 GMT
From an HR standpoint, I think when you make all positions have the same pay, you disincentivize anyone to want to move up. If the lowest person is making the same as say a manager, why would the lowest person ever want to be innovative, work harder or move up? He definitely is going to make a more "flat" company. And I can honestly say I don't know a single person who worked harder after they got a large pay bump if they stayed in the same position. Maybe that is just my cyncial-ness coming through. However, I do think it will buy him some loyalty and reduced turnover of the lower level jobs because the employees won't be able to find other comparable jobs in the area once they get used to living on the inflated salary. I do have to wonder what his clients will think because in the end, I suspect some will be in favor and others will see they have to pay more for his product/service so that his employees can make more than the market value of the position. Knowing the cost of employees (wages plus benefits plus payroll type taxes and insurance), it will be interesting to see what he ends up with at the bottom line after his pay cut and these pay increases. Will they be able to generate enough money to support it? Will he have to let some of the worst performers go because $70k is just too much for a position with a bad performer? I really wish I could actually analyze his payroll vs profits before and after. I am such a nerd! Me too. I'm also wondering on how much free publicity he's banking on to grow the business. He's certainly not the first employer to take a drastic pay cut - I'm wondering why he didn't join the $1 club. So what if he is? Lots of people like to do business with companies that align with their ethics and values. I know plenty of people who will seek out B Corps, certified Fair Trade, minority- and women-owned businesses and the like whenever possible. If he is able to grow his company because people appreciate the decision he's made and want to support that, I have no problem with that whatsoever. And again, everyone is NOT making the same salary. The compensation floor is simply being increased. |
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Post by bc2ca on Apr 16, 2015 19:43:39 GMT
This NYTimes article has more information on why he is doing this. As others have said, it is not a flat pay rate across the company but a new minimum. |
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Post by Deleted on Apr 16, 2015 19:45:03 GMT
No one forced him to make this decision -- so I'm fine with it. It's government-mandated ideas on wages that set off my alarm bells. Capitalism says he can set his wages at whatever he wants. And the law of supply and demand and market prices and all of those building blocks of capitalism will determine if he made the right move or not.
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At a former job, I was the chief phone person. Every time they hired someone new, they would decide that new person would now take the phones (because "anyone can do that") and I would get new, more "important" duties.
