Demonstrating Respect for People With High Minimum Salaries

Five years ago, the CEO of Gravity Payments Dan Price, made the bold decision to introduce a $70,000 minimum salary for all of his 120 staff. A third of those working at the company had their salaries doubled immediately. Here are some interesting quotes from an article on bbc.com about the change and the effects it had on the company and its staff:

Raising salaries didn’t change people’s motivation – he [CEO Dan Price] says staff were already motivated to work hard – but it increased what he calls their capability.”

“You’re not thinking ‘I have to go to work because I have to make money,’ Rosita Barlow [director of sales] agrees. “Now it’s become focused on ‘How do I do good work?'”

[Barlow] says that since salaries were raised junior colleagues have been pulling more weight.

“When money is not at the forefront of your mind when you’re doing your job, it allows you to be more passionate about what motivates you.”

These quotes echo W. Edwards Deming’s comments on pay and the value of intrinsic motivation. As Dan Pink, author of Drive: The Surprising Truth About What Motivates Us, said: “The best use of money as a motivator is to hire great people and then pay them enough to take the issue of money off the table.”

image with quote "pay is not a motivator"

Something else is interesting from the bbc.com article about Gravity:

Two senior Gravity employees also resigned in protest. They weren’t happy that the salaries of junior staff had jumped overnight, and argued that it would make them lazy, and the company uncompetitive.

This hasn’t happened.

This is another lesson; you should work to bring people into the new culture, but it will require new ways of thinking and acting. Expect that there will be some people who cannot make the required changes. It is healthy for those people to leave and find a better fit for the type of company they want to work in.

By the way, if this company culture appeals to you, Gravity Payments is hiring!

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Related: All That People Need to Know is Why Their Work is ImportantPeter Drucker Advocated a Ratio of 20 to 1 for CEO to Average Worker Pay (we are paying over 300 times now)What Really Motivates Us?

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1 Response

  1. Balaji S Reddie says:

    Understand the Learning Process of a person and then put that person on the right job – you’ll have to stop that person from working ! Joy for work creates Quality automatically . You won’t have to demand it – you will get it .
    Pay is not as much a motivator as learning is .

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