I earn what I earn, what others earn has no effect on my. If I resented the Receptionist making almost the same, then I’d have to resent the CEO making 100 times.
Exactly. Why is why at every job interview I’ve had, I always ask what the secretaries and janitors make. But seriously, your point, in a vacuum, makes sense. The reality is that if a slighted employee could make more somewhere else, there incentive to leave already existed. Besides, most people want to work at a place that pays give market wages.
Lastly though, your concerns are without basis as it’s not stated that people whose former salaries were near the new salary floor would not receive raises, and because this company almost certainly exists of mostly educated salaried employees and not those doing what is considered blue collar work.
Are you suggesting the hypothetical custodial staff are doing nothing all day? From what I see, the custodians work pretty hard for their money and often have less flexibility in their schedule than a lot of salaried employees. If not, then your example doesn’t really compare.
Scraping shit off the toilet is not, in itself, rewarding. 
That is what it is. And for the record it is a very tight, almost cutthroat business. Margins are thin, and companies have to follow lots of security rules and other things with overhead. They need to negotiate with their numbers of clients to get better rates from V/MC. They need to get a lot of clients and they are not easy to find.
The seamy underbelly is that once they get the merchants with tempting lower rates they try to nickel and dime them with various unmentioned fees, cancellation costs that may actually be illegal and other tricks (such as passing security cost onto the customer). Some businesses are better than others for them (restaurants rarely are able to get good rates due to the security concerns).
To get clients they use a lot of sales people. They have call centers that make loads of cold calls to small businesses and lots of field agents to try and woo the new customers. Given that the rates can get pretty low (along with the margins) there isn’t always a lot to distinguish one merchant account company from another. Often these sales people work solely on commission.
So anything that gives them a leg up would be an asset. Something like a stunt like this. He might be honest about it, but I’d say he’s hoping to get more clients via the attention he gets from doing it.
Apparently the CEO is finding out that this wasn’t such a great business move after all
EDIT: short summary, some of the people that were making just over $70k are pissed (as predicted) that the receptionist is making as much as them and left (getting more money elsewhere) and the huge productivity gains some implied have not been found.
Thanks for the update yellowjacketcoder. It was an interesting experiment, and I guess not a completely unexpected result, although I’m a little surprised the idea tanked so fast.
Maybe, but it doesn’t sound like the experiment has ended yet. From the articles, it seems the owner’s having financial troubles from a lawsuit from his brother that was in the works prior to the whole minimum salary idea. And ironically, partially based on the ‘excessive compensation’ the owner was giving himself.
So, the upper-level employees are unhappy with the implication that they’re no more valuable than the lady that empties the trash cans. Who could have expected that? (Pretty much everyone. That’s who.)
Hmmm… Am I the only one wondering if the true purpose of this experiment was to drive the company into the ground, so the CEO can say, “Here, bro! Take the fucking company. Ha Ha!” :dubious:
Predictable indeed. No need to explain the obvious, really, it’s just discouraging that people think so highly of themselves that they can’t understand they don’t get to soar without a cleaning crew or staff to support them. And that means it’s probably sensible to treat all parts of the machine equally.
I hope you meant “equitably” instead of “equally”. There are numerous reasons - education, training, responsibilities, stress, hours worked, etc. - why janitors and receptionists don’t make the same money as accountants and top sales people at most companies, let alone CEOs.
Discouraging as well that they’re so dense as to think it more important to compare their pay to that of janitors than it is to compare their pay to that of others in a similar position to their own. It doesn’t matter how much the janitor is making, that has no effect whatsoever on your own welfare.
But it also sounds like their new client list increased 175% month over month and that they’re having to support the huge volume of new clients while the billables for those clients don’t come due for 12 months or so. A good problem to have but still a problem.
I agree there are reasons, and we agree what those reasons are. I believe we may not agree on how valid those reasons are, however. Once an organization is large enough to require division of labor into specialized roles, I believe each of those roles are equally important to the success of the organization and deserve basically equal compensation.
Agreed. I don’t care how much money my coworkers are making. I’m sure that I’m making more than some, less than others- and I don’t care. All that matters to me is how much *I’m *making.
It seems to me that many of the problems with society today are due to people worried that they’re not beating everyone else.
…I work for doctors. While I’m a hard worker and important to the company, I cannot perform a cornea transplant, whereas one of the surgeons might just be able to crutch along in my place at buying TV ad time and writing marketing copy. (Maybe not at doing my Adobe InDesign layouts, though. I’m a freakin’ wizard there.) Their skills are at more of a premium than mine. In addition, I don’t need to carry ten million dollars’ worth of malpractice insurance, because if I have a shitty day at work, nobody’s suing me for ruining their life. There’s no way I should make as much money as them.
. . . And where regular federal income taxes aren’t. That’s why they arrange their compensation packages that way.
If they were able to get more money elsewhere, then this company was underpaying them. It doesn’t matter that the secretaries and housekeeping were all making $70K - if a person can earn more money elsewhere, then it makes financial sense to defect, and the high salaries of the people who empty your trash and manage your calendar have no bearing on that.
Salaries aren’t a zero-sum game. If all the raise money was going to the receptionist instead of the people that were actually making the business run, then those high impact individuals are going to leave to go somewhere where their talents will be compensated.
This CEO is overpaying the unskilled labor at the expense of not giving the skilled labor raises, which means the skilled labor is leaving, and now the CEO in finding out why you pay skilled labor more than unskilled labor.
Obviously paying everyone the same amount isn’t going to work, but what is the correct balance? If instead of paying everyone $70k, and instead of paying the CEO a million a year, the skilled labor $70k and the secretary $30K, you paid the CEO $750k, the skilled labor $85k and the secretary $45k you might find everyone felt valued and was able to provide for their families without causing people to feel like their efforts are not appreciated by the company.
Considering this whole thing started because the CEO recognized that he was overvalued and his staff were underpaid I think this would have been a much more effective change. Now all he’s done is given grossly overpaid CEOs something to point at and say, “See, paying people more doesn’t help!” while ignoring the needs of their employees and adding additional zeroes to the ends of their personal paychecks.