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comment by thenewgreen
thenewgreen  ·  3365 days ago  ·  link  ·    ·  parent  ·  post: The CEO Paying Everyone $70,000 Salaries Has Something to Hide




wasoxygen  ·  3359 days ago  ·  link  ·  

More dirt on Price:

CEO Dan Price hasn’t actually mortgaged his homes

This guy might be a mendacious publicity hound, but that alone doesn't mean his salary program is a bad idea. Things could go well for Gravity Payments thanks to all the publicity.

I think the salary program is a questionable idea in principle, however, which is why I was surprised at the demands that we give it more time.

You asked

    How do you quantify the amount of revenue a customer service rep brings in? A receptionist? A janitor? You can't.

Yet you must. How many janitors do you hire? Zero, one, ten? If you have no janitor you might have to offer more salary to other employees to lure them from cleaner workplaces where they don't have to take out their own trash. One janitor may be cheaper than paying everyone else more to put up with a dirty environment.

So you hire the number of CSRs, receptionists, and janitors that you judge will be best for the bottom line. Companies that do a better job at making these difficult decisions will be more successful.

It's possible, too, that paying above-average salaries will allow you to hire employees that perform above average. (This seems to be Costco's approach, leaving workers that perform below average to compete for jobs at Walmart.) The business is still getting more value from the employee than it is paying in compensation, just like Ford did after raising wages. I don't see how it is sustainable for a business to continually take a loss on labor any more than it can with any other input.

wasoxygen  ·  3365 days ago  ·  link  ·  

Thanks, another fascinating update in this developing story. I expect that a little scandal will work in Price's favor, that is the usual pattern. It does make it harder to conclude anything definitive about his salary experiment.

Earlier items: