Seattle CEO Who set Company Minimum Salary at $70k/yr Struggling

a reply to: Xtrozero

And I'd rather continue my work in EMS... I do that quite well.

All debating aside, it will be interesting if this company is still in business in 5 years. As I have said before, if my CEO makes good company decisions and we prosper over decades I'm happy with what he makes, because that means I have a job for decades to come....

originally posted by: EternalSolace

And I'd rather continue my work in EMS... I do that quite well.

Cool you do EMS and I play computer games for 70k each, we are both happy then....life is good.

originally posted by: burdman30ott6
The man has the business sense of a toadstool (or he's got a huge derivative backup against the company and is trying to achieve a spectacular collapse.)

That is the thing with all this. People assume that everyone making under XX amount are working for a super rich guy that keeps all the profits for themselves and that there is a huge margin to play with. With this guy even when he works for nothing it means little in the end to what his income does in supporting the employees.

originally posted by: Olivine
a reply to: bigfatfurrytexan

I don't understand where this idea comes from that all of the lower paid employees that got the big raises were slackers, or dead weight. I find it hard to imagine lazy workers being tolerated in a small, high-energy company.

This seems to me, that it was your typical, folks in the office making more money than the clerks, or the technicians in the field, scenario.

Then Mr. Price raised the pay to his lowest compensated workers, because he was trying to lower the stress in their lives.

I understand what you're saying here and I agree that he wanted to do something good for his employees. But apparently he didn't really understand the free enterprise system or business management and let his feelings get in the way of logic and reality.
It's not that the lower paid workers are slackers, it's that they haven't dedicated the time, energy, initiative and ambition to the job that the higher-paid people have devoted to the business.
By lessening their stress in the short term, he's increased his stress levels tremendously and has incurred the wrath of people who trusted him to make good decisions based on the analysis of well-paid staff. And now, he faces the very real possibility of not only losing his position but seeing the company go down the drain in a year or so. What will the stress levels of those folks used to making $70k/year going to be when they are unemployed as a result of his decision? They've likely maxed out their new limits on their credit cards, bought houses, boats and gadgets galore on their newly-found wealth. How's that going to work out when the janitor can't find another $70k gig mopping and dusting?

This fellow isn't the first to try this. It's just that he seems to be the one who caught the attention.
I've watched several acquaintances/friends lose their homes, their shirts and their inheritances because they tried to run a business on feelings rather than cold, hard reality. The remains after the brutal truth comes crashing around them are heartbreaking. They don't get that bankers are realists.
In every case, the people they had hired with such expectations ended up worse off than before.

He seems to be paying for his rash decision in his personal life in having to rent out his home. To be honest though, I can't really say I feel sorry for a guy who's been making millions and hasn't bothered to pay off his mortgage and can't make it on $70k/yr. My parents weren't financial wizards but they taught me better economic sense than that!

But perhaps he'll turn it all around in another year and prove us all very, very wrong.

originally posted by: Bluntone22
This guy must be a frickin idiot. Where did he expect the money for this to come from?

He cut his own salary to make up the difference. The companies payroll expenditures never changed, the only thing that changed was that a couple of his employees got upset that others were making close to the same wage and quit because it hurt their sense of self worth.

This is quite common in business, part of the reason it's so taboo for people to discuss their wages is that when everyone knows what everyone else is making, they don't approve of where they sit on the scale and demand more which is precisely what happened here.

originally posted by: Xtrozero
I don't agree as an overall norm. I think equality goes both ways. My CEO makes 20 million and as long as he makes my life better and better I say he earned it, but if I see someone make as much as I do and working 1/2 as much I would get pissed.

Why? They have their job, you have yours. Does them taking home the same paycheck harm you in any way at all?

a reply to: Aazadan

they don't approve of where they sit on the scale and demand more which is precisely what happened here.

Can you point out where you got this information?

originally posted by: Phage
Can you point out where you got this information?

The article where the woman complains because someone else is getting near her salary. Or you could read just about any reddit career forum, or glassdoor, or any other career website. People are hierarchical in nature, there's a near psychological need for people to be able to measure themselves as superior to others. Wages are a very quantifiable way of doing so.

What this CEO did rose his employees up and that threatened the ego of some of them.

a reply to: Aazadan

The article where the woman complains because someone else is getting near her salary.

That is not what the woman's complaint was but you said that more was demanded. I asked for a source for that claim.

What this CEO did rose his employees up and that threatened the ego of some of them.

What this CEO did was treat lower paid employees better than higher paid employees.

She helped calculate whether the firm could afford to gradually raise everyone’s salary to $70,000 over a three-year period, and was initially swept up in the excitement. But the more she thought about it, the more the details gnawed at her.

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said. To her, a fairer proposal would have been to give smaller increases with the opportunity to earn a future raise with more experience.

A couple of days after the announcement, she decided to talk to Mr. Price.

“He treated me as if I was being selfish and only thinking about myself,” she said. “That really hurt me. I was talking about not only me, but about everyone in my position.”

Already approaching burnout from the relentless pace, she decided to quit.

www.nytimes.com...

originally posted by: PhageWhat this CEO did was treat lower paid employees better than higher paid employees.

How so? She was already making above 70k and she even got a raise out of the new plan. It sounds to me like she was treated quite well. She's just upset that others were also treated well.

originally posted by: bigfatfurrytexan
Me? I sure won't work for a place that pays me the same as my peers. I outperform...thats just what i do. I don't turn it off...its just how i work. But i outperform those i work with consistently, and have always been rewarded for that effort. If i had to drag dead weight along, and get paid the same as the dead weight...there'd be problems.

Are you sure? Just about everyone thinks they outperform their peers, or that they're in the above average group for their skillset when half the people (or more, depending on your cutoff for above average) are not. It's simultaneously inflating ones own sense of self worth and deflating others. When everyone knows the salary gaps are closer, people thinking they're an above average employee begin to feel screwed even when that may not be the case.

a reply to: Aazadan

It sounds to me like she was treated quite well. She's just upset that others were also treated well.

Yes, people who had not made the contributions she had made. People who did not have the experience or skill set she (and others) do.

Are you sure? Just about everyone thinks they outperform their peers, or that they're in the above average group for their skillset when half the people (or more, depending on your cutoff for above average) are not.

This is not about "peers". This is about those at lower skill levels receiving major increases while those at higher levels did not. You have a lot of experience in the work force, do you? Because I've been at it for a long time. Working with others both above and below my skill level. I do not begrudge those above me but I sure as hell would be pissed if someone who was new to the job was bumped up to my rate, not for merit, for just because.

In fact, I quit a job when that happened a while back. Ego? Maybe. Or maybe it was a sign that my employer didn't actually have any idea of what my job entailed or cared about it. Interestingly, the company went belly up about 6 months later. Not because of me, because of a bunch of stupid decisions, some of which I had let them know my opinion of.

originally posted by: Phage
Yes, people who had not made the contributions she had made. People who did not have the experience or skill set she (and others) do.

So she made the contributions to make that happen in the workplace. That's not good enough for her, so she even got a raise out of doing so. She's just upset that others were also now doing well. It's very common for most people to think this way. There's plenty of business managers in this thread, I'll let them back me up with their experience if they choose to. What happens when all of your employees know the wages of your other employees? I'm sure their answer will be somewhere between chaos and hostile work place.

This is not about "peers". This is about those at lower skill levels receiving major increases while those at higher levels did not. You have a lot of experience in the work force, do you? Because I've been at it for a long time. Working with others both above and below my skill level. I do not begrudge those above me but I sure as hell would be pissed if someone who was new to the job was bumped up to my rate, not for merit, for just because.

Some, but not a lot, I'm definitely in the below average camp for my skillset. I tend to have more technical jobs while the managers are non technical. This results in conversations such as why I can upload a photo's GPS coordinates to a website, but I can't make that only happen when the photo has a bird in it. Or why I can make a camera identify a logo on a billboard, but be unable to identify that logo on a person wearing a costume. Or why the precise stats on the itemcards on this loot in a video game really do matter down to the last digit. Or my personal favorite "design an economic system for our MMO... you have until the systems meeting tomorrow morning"

Personally, I think it's mostly just ego. A lot of people measure others by their earnings. If your earnings are low so is your opinion and your actions. If you think your earnings are high, then the actions you take are backed by that wealth, and your opinions are those of someone successful which gives them more weight. I think that's a very flawed way of looking at things, but that's how many do. From my viewpoint wages are literally nothing more than a game. The market doesn't magically pay people what they're worth, it pays people based on how much and how well they negotiate. People for the most part choose to make what they make for various reasons.

Compensation is not a meritocracy, despite some peoples claims otherwise.

originally posted by: Phage
This is not about "peers". This is about those at lower skill levels receiving major increases while those at higher levels did not.

So it's about vanity and greed.... got it.

originally posted by: Xtrozero

Cool you do EMS and I play computer games for 70k each, we are both happy then....life is good.

I guess the reality is going to pain you. The leading Youtube "let's play" earner, online name PewPieDie, made over four million dollars last year. A shade more than seventy thousand. This was all accomplished through advertising revenue - something that I am positive his advertisers are quite happy about.

That tidbit aside, your post walks right into the ego driven identity politics that others are discussing here. You have arbitrarily decided that one profession is inferior to another and made value judgments based upon that point of view that, given the real world facts, do not at all support your predisposed biases.

IE the profession you chose to slight just happens to be far more lucrative than you probably imagined.

originally posted by: Aazadan
my personal favorite "design an economic system for our MMO... you have until the systems meeting tomorrow morning

Lol, you don't need to be technical to see the error in this request. Just a modicum of intelligence would suffice.

originally posted by: Aazadan
Compensation is not a meritocracy, despite some peoples claims otherwise.

In my experience compensation is generally inversely proportional to merit, apart from me of course . Both cream and shiite float but there is a hell of a lot more shiite in this world.

a reply to: diggindirt

It's not that the lower paid workers are slackers, it's that they haven't dedicated the time, energy, initiative and ambition to the job that the higher-paid people have devoted to the business.

That's not even usually true, except in the minds of some extremely overblown ego's.

Go to any large company and some of the hardest working, most dedicated and longest serving employees are at the bottom. Most higher ups just come walking in, in there twenties or early thirties with hardly any experience, because of some fancy degree (or because they know someone) and then get there cushy little 100k salary. They rarely have much work ethic either. Just a huge ego that makes them think there more important than everyone else.

When the fact is, if it wasn't for the highly experienced lower grade workers who have been prepared to work there hands to the bone, doing repetitive tasks day in and day out for the last 20 years, then these spoiled big headed higher up workers wouldn't have a job in the first place.

Then you get people who spend there days in a cushy air conditioned office, sipping coffee and chatting with there peers, saying the people sweating it out in the factory don't deserve a living wage. Simply because they want the satisfaction of walking out to the car park in the afternoon and observing how much better there car is than the employee's who are under them.

Its just mind blowing how blatantly vain people can be.

btw, it may not always work like that in all work places, but it most certainly does in the manufacturing industry.

originally posted by: Subaeruginosa
a reply to: diggindirt

It's not that the lower paid workers are slackers, it's that they haven't dedicated the time, energy, initiative and ambition to the job that the higher-paid people have devoted to the business.

That's not even usually true, except in the minds of some extremely overblown ego's.

Go to any large company and some of the hardest working, most dedicated and longest serving employees are at the bottom. Most higher ups just come walking in, in there twenties or early thirties with hardly any experience, because of some fancy degree (or because they know someone) and then get there cushy little 100k salary. They rarely have much work ethic either. Just a huge ego that makes them think there more important than everyone else.

When the fact is, if it wasn't for the highly experienced lower grade workers who have been prepared to work there hands to the bone, doing repetitive tasks day in and day out for the last 20 years, then these spoiled big headed higher up workers wouldn't have a job in the first place.

Then you get people who spend there days in a cushy air conditioned office, sipping coffee and chatting with there peers, saying the people sweating it out in the factory don't deserve a living wage. Simply because they want the satisfaction of walking out to the car park in the afternoon and observing how much better there car is than the employee's who are under them.

Its just mind blowing how blatantly vain people can be.

btw, it may not always work like that in all work places, but it most certainly does in the manufacturing industry.

I get your point. The fact that many have to work their ass off, often working double the hours of office employees, only to make 1/4 of their office peers pay check. I've seen it with my parent. 60+ hours a week 20+ years on the job and still make 1/10 of high level management. And in not talking about the CEO but the building managers. It should have a higher pay wage, but 10x more? I rather die than be a factory laboring slave who will get fired before retirement hits. No compassion for the peseants, only respect for the rich.

a reply to: burdman30ott6

Just wanted to point out that this whole thread is an anecdote fallacy.

If he wanted to make a point, he would have been better served to give himself a salary cut.. not to the point that he did, and then give his staff a solid % of increase across the board, but based on say.. actual merit of work done and value to the company, not some random value picked out of the blue that rewards those that may be the least skilled or the least motivated, but gives nothing to those who have worked hardest to be where they were in the chain.

I think his employees would have been thrilled with a 25% increase in pay across the board for example.

He just didn't think it out. Trying to make a point, he just did the first thing that came to mind.. or perhaps he just did what he felt would generate the biggest publicity, who knows.

originally posted by: fleabit
If he wanted to make a point, he would have been better served to give himself a salary cut.. not to the point that he did, and then give his staff a solid % of increase across the board, but based on say.. actual merit of work done and value to the company, not some random value picked out of the blue that rewards those that may be the least skilled or the least motivated, but gives nothing to those who have worked hardest to be where they were in the chain.

I think his employees would have been thrilled with a 25% increase in pay across the board for example.

He just didn't think it out. Trying to make a point, he just did the first thing that came to mind.. or perhaps he just did what he felt would generate the biggest publicity, who knows.

When you have cash, you have leverage. You have what others want.

I'd think it more prudent to take maybe $250k from my salary and use it to make a brass ring for my employees to reach for. Improve productivity, spread some more cheddar....win/win.

Business isn't about altruism. Its about making your payroll, and keeping the doors open. No matter how kind you may want to be, as "the boss" your ultimate role is to maintain job security for your people.

Knew a hotel owner that liked to give a 25 cent raise to his housekeepers every 90 days. He had really nice rooms, too...it worked. Until a couple of years go by and his housekeepers are making $15/hr (more than the skilled positions at the front desk) and the hotel's market took a downturn. He sold the property, and the first thing the new owners did: fire the house keepers, then rehire them at minimum wage. Had he paid them a decent wage without going overboard, those ladies would have been much better off. The new owners wouldn't have taken drastic action on a department earning $9-$10/hr.

In a call center I managed, the site director ended up hiring way too many supervisors, and paying them too high a wage. When it came time to fire him for losing money at the site, the company was left in a predicament. Their only 2 options: close the site and lose the investment in time/resources. Or lay off employees and try to regroup.

A "good manager" will make sure to keep the ship in a sustainable operating margin. Because when you blow it, you create a whole lot of unemployed people.