A few years ago the CEO of Gravity Payments, Dan Price, decided to change the pay structure at his company to ensure a better and happier workplace. He decided to make the base salary $70,000 and it changed the lives of all employees for the better. The company has tippled its revenue since the change in 2015, employees are able to afford housing, and employee pension contributions are up. This is how you create a happy productive workforce!
Hopefully more companies will realize that actually paying workers what they are worth will make the entire corporation better.
Breathing in the crisp mountain air as he hiked with Valerie, Price had an idea. He had read a study by the Nobel prize-winning economists Daniel Kahneman and Angus Deaton, looking at how much money an American needs to be happy. He immediately promised Valerie he would significantly raise the minimum salary at Gravity.
After crunching the numbers, he arrived at the figure of $70,000. He realised that he would not only have to slash his salary, but also mortgage his two houses and give up his stocks and savings. He gathered his staff together and gave them the news.
He’d expected scenes of celebration, but at first the announcement floated down upon the room in something of an anti-climax, Price says. He had to repeat himself before the enormity of what was happening landed.