In 2015, Gravity Payments CEO Dan Price cut his salary by 90% and raised the minimum annual salary of each employee to at least $70K/year. The business world was shocked with some predicting the bankruptcy of his company. Earlier in 2021, he said the opposite has happened. Revenue has tripled, he's hired more employees and he's still paying them, and himself, a $70,000 salary.
With employees pushing back on the return to the office and resigning in large numbers, was Price's decision ahead of its time? Instead of being paid over 320x employee compensation, should CEOs and leaders pay better and treat their employees differently?
Are we facing an employee revolution?
Employees Have Higher Expectations
Employees have higher expectations for their quality of life after losing a year or more to the pandemic. Perhaps it was the uncertainty of it all, being in isolation, losing loved ones, and somehow surviving, but employees don't want to work somewhere that they don't feel valued. This is evidenced by the so-called Great Resignation and an increase in entrepreneurship and freelancers. When Gravity Payments took a hit during 2020, instead of losing employees, many of them voluntarily took a pay cut so the company could survive. The generosity of their CEO has been paid back beyond predictions. It would seem that offering more to the workforce results in retention and collective investment in the success of the company.
6 years ago today I raised my company's min wage to $70k. Fox News called me a socialist whose employees would be on bread lines.— Dan Price (@DanPriceSeattle) April 13, 2021
Since then our revenue tripled, we're a Harvard Business School case study & our employees had a 10x boom in homes bought.
Always invest in people. pic.twitter.com/o7Ca7I4b7e
Invest in People...or Treat People Like Investors
A recent opinion piece in MarketWatch examined what it would be like if employers treated employees like investors. Reflecting on a 2018 Harvard Business Review article, it was noted that the stock market value of a firm directly correlates to employee satisfaction. With employers trying to match or predict the demands of their workers, those that offered profit-sharing or equity incentives, as well as personal and social benefits, appeared to profit from employee satisfaction and stock market value. Even though that's good, the author of the article says it's "not revolutionary." Employees still expect more.
For generations, we've organized our lives around our work.— Adam Grant (@AdamMGrant) October 9, 2021
Our jobs have dictated where we make our homes, when we see our families, and what we can squeeze into our downtime.
What if we reversed that, and started planning our work around our lives?https://t.co/8dLTr2nb3S pic.twitter.com/jyhfHSzd9d
Employee Revolution is Freedom
It's time to help employees achieve happiness, not just satisfaction. Organizational psychologist Adam Grant writes that the pandemic forced employers to offer flexibility and now we want more. "Real flexibility," he says, "is having autonomy to choose your people, your purpose, and your priorities." Even with remote work, employees want to decrease the number of meetings and interruptions. Unfortunately, business leaders still value being seen, even if productivity goes up when working remotely. For remote or hybrid workers, that can mean discrimination and being overlooked for promotions. There remains much for employers and organizations to uncover to offer autonomy, build value within their workforce and keep collaboration and connection strong. Grant suggests that the freedom employees are looking for starts with allowing them to plan work around their lives. It's up to employers to listen and experiment.