A year ago I shared the story about Gravity Payments, the
Seattle credit card processor whose CEO decided his employees would be happier
if they all earned more than $70,000 a year. Dan Price’s plan to gradually raise
all their salaries to at least that amount was initially met with euphoria. In the
months that followed, enthusiasm dimmed. Clients have bailed; some
because they felt the ensuing media circus was “distracting,” and others fearing
the firm would raise prices to meet payroll. Many of their most valuable
employees are gone, too. “He gave raises to people who have the least skills,”
said one, “and the ones who were taking on the most didn’t get much of a bump.”
Another complained, “People who just clocked in and out were making the same as
me.” Dan Price should study John Stacey Adams’ Equity Theory of Motivation. So
should everyone clamoring for a higher minimum wage.
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