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PostPosted: Sun Jul 17, 2016 7:48 pm 
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Thirteen months ago, Dan Price decided to radically change the salary structure of his company Gravity Payments. He announced the minimum salary for all of his employees would increase to $70,000 over three years. It is a gamble that is paying off. USA TODAY

About a year ago, Gravity Payments CEO Dan Price turned the national debate over a $15 minimum wage inside out by announcing that he was raising the salaries of his 100 or so employees to at least $70,000.

With shoulder length hair and Brad Pitt looks, Price, then 31, made international headlines and was lionized as a hero of the working class. Most of his employees rejoiced. Two quit in anger. Rush Limbaugh denounced him as a socialist.

Months later, Price’s motives were questioned as a result of a lawsuit that his older brother and partner filed against him. On the eve of the trial, Gravity, which processes credit card transactions for small businesses, has released its financial results over the past year to USA TODAY and on its website.

“We want a chance to tell the story rather than having it come out as bullet points” during the trial, says company spokesman Ryan Pirkle.

The narrative provides something of a case study on the impact of big raises on a company’s bottom line.

In a nutshell: It’s complicated. Revenue at the Seattle-based firm has soared, though that largely appears to be due to the worldwide publicity generated by the announcement. Profits surged as well, but have dipped so far this year, in part because of the higher labor costs but mostly because of other one-time factors. Employees describe more comfortable, stress-free lives, allowing them to better focus on their jobs. And some other firms inspired by Price to lift wages dramatically are reporting positive outcomes.

The lesson? Big pay hikes may yield surprisingly beneficial results, especially in the current tight labor market. But the outsized, across-the-board increase Price shelled out should not be a benchmark for most companies, experts say.

Price says he wasn’t primarily thinking of the bottom line when he announced the raises on April 13, 2015. “It was so people who are giving their blood, sweat and tears for our clients can live a normal life and pay their bills,” he said in an interview.

<snip>

Full article at:
http://www.usatoday.com/story/money/2016/05/26/does-70000-minimum-wage-work/84913242/

Gravity Payments infographics on how the pay increases has affected their company:
https://gravitypayments.com/thegravityof70k/#infographic-1

How happy are the employees? They're so happy this happened:
www.youtube.com Video from : www.youtube.com

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PostPosted: Sun Jul 17, 2016 8:49 pm 
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Wow! If they work a 40hr week, that's 1,920hrs in a year. That works out to $36.45hr. Shit, I'd be happier than a pig in mud if I made $25K a year.

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PostPosted: Mon Jul 18, 2016 2:16 pm 
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This is a textbook illustration of Maslow's hierarchy of needs.

Under Maslow's theory, human needs must be fulfilled in a specific order, often depicted as a pyramid...

Image

The most basic needs are physiological; air, water, food, etc., and these must be fulfilled first. Once those basic needs are fulfilled, people are motivated by "safety" needs, which include financial security. Once those are fulfilled, people move on to higher order needs.

There have been countless books written which apply Maslow's theory to the work environment. The bottom line is, compensation is a lower order need. Once someone earns enough to give them "safety" and financial security, paying them more provides no additional motivational benefit. In order for them to be more motivated, the job must satisfy their higher order needs, such as "self-actualization."

This is EXACTLY what we saw here. Look at the "happiness graph" published by the company: https://gravitypayments.com/thegravityof70k/#infographic-1

The nearly 50% increase in average compensation provided a very temporary boost in employee happiness, which then returned exactly to the level seen before the increase. So a 50% pay raise bought the company precisely ZERO in terms of incremental long-term employee happiness. Employees were just as happy / dissatisfied AFTER the raise as they were before it.

Note that the company expected that to happen, or so management claims. The caption above the graph reads, in part, "Although Gravity's happiness rate climbed to historic levels immediately after the $70K decision, as expected, it dipped back down to normal levels a few months later."


There is a lesson in there for lefties who try to argue more highly paid employees are more motivated...but I'm sure said lefties won't internalize it.

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PostPosted: Mon Jul 18, 2016 3:39 pm 
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This is a textbook illustration of Maslow's hierarchy of needs.

Under Maslow's theory, human needs must be fulfilled in a specific order, often depicted as a pyramid...

Image

The most basic needs are physiological; air, water, food, etc., and these must be fulfilled first. Once those basic needs are fulfilled, people are motivated by "safety" needs, which include financial security. Once those are fulfilled, people move on to higher order needs.

There have been countless books written which apply Maslow's theory to the work environment. The bottom line is, compensation is a lower order need. Once someone earns enough to give them "safety" and financial security, paying them more provides no additional motivational benefit. In order for them to be more motivated, the job must satisfy their higher order needs, such as "self-actualization."

This is EXACTLY what we saw here. Look at the "happiness graph" published by the company: https://gravitypayments.com/thegravityof70k/#infographic-1

The nearly 50% increase in average compensation provided a very temporary boost in employee happiness, which then returned exactly to the level seen before the increase. So a 50% pay raise bought the company precisely ZERO in terms of incremental long-term employee happiness. Employees were just as happy / dissatisfied AFTER the raise as they were before it.

Note that the company expected that to happen, or so management claims. The caption above the graph reads, in part, "Although Gravity's happiness rate climbed to historic levels immediately after the $70K decision, as expected, it dipped back down to normal levels a few months later."


There is a lesson in there for lefties who try to argue more highly paid employees are more motivated...but I'm sure said lefties won't internalize it.

Maslow's Hierarchy of Needs can also be apply to businesses and organizations.

Most employees experience "happiness" in their job when they feel their pay is appropriate for their work and level(s) of responsibility, when they feel their work actually contributes to the success of their employer, when they feel the employer actually listens and responds to their needs, when they feel a sense of "family" with their fellow employees. Employees can attain the various levels of the hierarchy and reach a state of "happiness" (self-actualization) when their employer meets their needs which explains why many employees stay with a company for decades.

There is a lesson in there for righties who try to argue keeping employees wages low make them more motivated...but I'm sure said righties won't internalize it.

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PostPosted: Mon Jul 18, 2016 6:29 pm 
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As long as the business has sufficient revenues to support that pay structure it seems workable. But it's going to be small number of enterprises that can function effectively with this salary model.


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PostPosted: Mon Jul 18, 2016 9:42 pm 
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Now wait a minute! Does this mean that companies don't need to pay CEOs millions every year to motivate them? Is that what Jessep is saying?


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PostPosted: Mon Jul 18, 2016 9:43 pm 
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As long as the business has sufficient revenues to support that pay structure it seems workable. But it's going to be small number of enterprises that can function effectively with this salary model.

A high-wage model is the most workable for our society. You pay workers more, they have more money to buy things, which means more business...

Costco proves the high-wage model works.


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PostPosted: Mon Jul 18, 2016 9:47 pm 
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A high-wage model is the most workable for our society. You pay workers more, they have more money to buy things, which means more business...

Costco proves the high-wage model works.

Costco is one of the most profitable companies and it's employees constantly rate it high as i employee satisfaction. They also have a lower employee turnover rate than Walmart of Sam's Club.

BTW, a majority of Costco's main income comes from membership fees rather than sales.

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PostPosted: Mon Jul 18, 2016 11:20 pm 
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Costco is one of the most profitable companies and it's employees constantly rate it high as i employee satisfaction. They also have a lower employee turnover rate than Walmart of Sam's Club.

BTW, a majority of Costco's main income comes from membership fees rather than sales.


Costco also has half the employees per store that Walmart has.

Costco also is able to be very selective in their choice of employees building a higher quality labor force.

And the last thing Costco wants is their competitors matching their pay, benefits, and efficiency for then they loose their premium edge of a higher quality labor force.


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PostPosted: Tue Jul 19, 2016 12:47 am 
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Costco also has half the employees per store that Walmart has.

Costco also is able to be very selective in their choice of employees building a higher quality labor force.

And the last thing Costco wants is their competitors matching their pay, benefits, and efficiency for then they loose their premium edge of a higher quality labor force.

Better pay and better benefits combined with a good corporate environment attracts better employees. That's something Walmart has rejected in the name of higher profits.

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PostPosted: Tue Jul 19, 2016 6:58 am 
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Costco also has half the employees per store that Walmart has.

Costco also is able to be very selective in their choice of employees building a higher quality labor force.

And the last thing Costco wants is their competitors matching their pay, benefits, and efficiency for then they loose their premium edge of a higher quality labor force.

Higher pay MAKES better employees. You treat people as if they are valuable to you, including in what you pay them, they work harder, take more pride and are more productive. The high-wage model works.


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PostPosted: Tue Jul 19, 2016 7:02 am 
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This is a textbook illustration of Maslow's hierarchy of needs.

Under Maslow's theory, human needs must be fulfilled in a specific order, often depicted as a pyramid...

Image

The most basic needs are physiological; air, water, food, etc., and these must be fulfilled first. Once those basic needs are fulfilled, people are motivated by "safety" needs, which include financial security. Once those are fulfilled, people move on to higher order needs.

There have been countless books written which apply Maslow's theory to the work environment. The bottom line is, compensation is a lower order need. Once someone earns enough to give them "safety" and financial security, paying them more provides no additional motivational benefit. In order for them to be more motivated, the job must satisfy their higher order needs, such as "self-actualization."

This is EXACTLY what we saw here. Look at the "happiness graph" published by the company: https://gravitypayments.com/thegravityof70k/#infographic-1

The nearly 50% increase in average compensation provided a very temporary boost in employee happiness, which then returned exactly to the level seen before the increase. So a 50% pay raise bought the company precisely ZERO in terms of incremental long-term employee happiness. Employees were just as happy / dissatisfied AFTER the raise as they were before it.

Note that the company expected that to happen, or so management claims. The caption above the graph reads, in part, "Although Gravity's happiness rate climbed to historic levels immediately after the $70K decision, as expected, it dipped back down to normal levels a few months later."


There is a lesson in there for lefties who try to argue more highly paid employees are more motivated...but I'm sure said lefties won't internalize it.

Is there a lesson for companies that say they have to pay multi-million dollar salaries to their CEOs to keep them motivated?

Looks like Jessep, as usual, will run away - just like he refuses to comment on other threads in this forum.


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PostPosted: Tue Jul 19, 2016 11:58 am 
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Better pay and better benefits combined with a good corporate environment attracts better employees. That's something Walmart has rejected in the name of higher profits.


Higher profits isn't the target for Walmart. Their traditional profit margins are 2-3% while Costco's are in the 10%. Walmart's target appears to be enormous cash flow. With that level of cash flow they can expand aggressively, invest in the business, pay dividends, and since taxes are on profits keeping those margins low through investment and expansion keeps taxes lower. They don't see an advantage in cream of the crop employees at the checkout lines or stocking shelves. They do however seek out top talent at the store manager and above levels.


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PostPosted: Tue Jul 19, 2016 1:16 pm 
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Higher profits isn't the target for Walmart. Their traditional profit margins are 2-3% while Costco's are in the 10%. Walmart's target appears to be enormous cash flow. With that level of cash flow they can expand aggressively, invest in the business, pay dividends, and since taxes are on profits keeping those margins low through investment and expansion keeps taxes lower. They don't see an advantage in cream of the crop employees at the checkout lines or stocking shelves. They do however seek out top talent at the store manager and above levels.

That means a very small percentage of the employees (store managers, regional managers, corporate execs) reap the benefits of teamwork and making the company profitable.

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PostPosted: Tue Jul 19, 2016 1:42 pm 
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That means a very small percentage of the employees (store managers, regional managers, corporate execs) reap the benefits of teamwork and making the company profitable.


The percentage isn't as small as you might think. The Walmart behind the scenes employee numbers are huge. Not a majority but not far off. And while what they do is often bizarre it's also very often sophisticated. The folks that run their e-commerce business are very well rewarded.

With floor personal they still operate by a very antiquated retail model - one that is common to most big retailers - that favors part time.


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PostPosted: Tue Jul 19, 2016 4:15 pm 
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The percentage isn't as small as you might think. The Walmart behind the scenes employee numbers are huge. Not a majority but not far off. And while what they do is often bizarre it's also very often sophisticated. The folks that run their e-commerce business are very well rewarded.

With floor personal they still operate by a very antiquated retail model - one that is common to most big retailers - that favors part time.
BS. The Walton clan's plan is to make BILLIONS. And they're doing it too. MaoMart advertises low prices. Not so. I've price shopped between MaoMart and WinCo (groceries) and WinCo beats MaoMart hands down. That's on EVERY product I've compared.

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PostPosted: Tue Jul 19, 2016 4:59 pm 
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BS. The Walton clan's plan is to make BILLIONS. And they're doing it too. MaoMart advertises low prices. Not so. I've price shopped between MaoMart and WinCo (groceries) and WinCo beats MaoMart hands down. That's on EVERY product I've compared.

Winco The Company With Lower Prices And Better Benefits Than Walmart

Millionaire Grocery Clerks: The Amazing WinCo Foods Story

Another amazing employee owned company:
Friends in Knead at Alvarado Street Bakery

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PostPosted: Tue Jul 19, 2016 6:38 pm 
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The percentage isn't as small as you might think. The Walmart behind the scenes employee numbers are huge. Not a majority but not far off. And while what they do is often bizarre it's also very often sophisticated. The folks that run their e-commerce business are very well rewarded.

With floor personal they still operate by a very antiquated retail model - one that is common to most big retailers - that favors part time.

Got any figures to support the behind the scenes employee numbers?

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PostPosted: Wed Jul 20, 2016 1:34 pm 
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Got any figures to support the behind the scenes employee numbers?

greengrass? greengrass? greengrass?

Bueller? Bueller? Bueller?

Hey, McFly!

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PostPosted: Wed Jul 20, 2016 1:40 pm 
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Higher profits isn't the target for Walmart. Their traditional profit margins are 2-3% while Costco's are in the 10%. Walmart's target appears to be enormous cash flow. With that level of cash flow they can expand aggressively, invest in the business, pay dividends, and since taxes are on profits keeping those margins low through investment and expansion keeps taxes lower. They don't see an advantage in cream of the crop employees at the checkout lines or stocking shelves. They do however seek out top talent at the store manager and above levels.

Walmart is a disgrace. The owners are a disgrace.

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PostPosted: Wed Jul 20, 2016 7:56 pm 
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I always shop at Walmart. I have no interest in places like Costco where I have to pay for a membership. Too few stores and sells a lot of made in China as well.

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PostPosted: Wed Jul 20, 2016 8:25 pm 
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Walmart is a disgrace

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PostPosted: Wed Jul 20, 2016 8:27 pm 
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I always shop at Walmart. I have no interest in places like Costco where I have to pay for a membership. Too few stores and sells a lot of made in China as well.
I only shop at MaoMart because that's my only choice. I guess it doesn't bother you that MaoMart FORCED suppliers to move their manufacturing to China.

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PostPosted: Wed Jul 20, 2016 8:42 pm 
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I refuse to shop at Walmart. Almost everything I need I can get at another store or online. As for Costco, I don't mind paying the membership fee because I like what they carry, their prices, and their service. A couple of years ago, I bought some Costco brand Chili. It turner out later there was a recall on it and Costco called me to let me know of the recall. Walmart wouldn't do that, would they?

Also, I buy my eyeglasses from Costco and they have lower prices than just about anyone.

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PostPosted: Thu Jul 21, 2016 11:37 am 
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I always shop at Walmart. I have no interest in places like Costco where I have to pay for a membership. Too few stores and sells a lot of made in China as well.

I won't shop at Walmart. You get what you pay for, and most everything at Walmart is crap. Plus, I hear they don't even care if they keep their shelves stocked. They hold the customer in contempt. I'd rather go somewhere where I'm respected.


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