Can you give me your genuine opinion on this article in terms of "Business Management," please?

PO2 Angelika Laist — Wed, 09 Dec 2015 20:51:15 -0500

http://www.bloomberg.com/features/2015-gravity-ceo-dan-price/

Please ignore the last part of the article about his wife ranting over his abuse, it has nothing to do with my question. I would just like to know what you guys think. Would this work for other companies? Bloomberg serves the interest of business community at large, not the employees, why did they run this article?

The CEO Paying Everyone $70,000 Salaries Has Something to Hide

Inside the viral story of Gravity CEO Dan Price.

Response by SPC John Canning made Dec 9 at 2015 10:00 PM

SPC John Canning — Wed, 09 Dec 2015 22:00:52 -0500

I don't think so, because just like in school every group has people who fill roles. Someone will slack and jealousy will ensue

Response by SPC John Canning made Dec 9 at 2015 10:03 PM

SPC John Canning — Wed, 09 Dec 2015 22:03:30 -0500

PO2 Angelika Laist http://www.entrepreneur.com/article/249313

The Sad Saga of the $70,000 Minimum Salary Company

The utopian vision of an entrepreneur who wanted to do his part for income inequality looks shortsighted in the cold light of reality.

Response by Capt Richard I P. made Dec 10 at 2015 12:37 AM

Capt Richard I P. — Thu, 10 Dec 2015 00:37:26 -0500

PO2 Angelika Laist You might enjoy the articles I linked below, BLUF: the reason this is getting play in business journalism is because it is counter to common business practice, and it appears to be working.

Response by LTC Private RallyPoint Member made Dec 10 at 2015 9:29 AM

LTC Private RallyPoint Member — Thu, 10 Dec 2015 09:29:02 -0500

I read the article in it's entirety and as someone who will be pursuing a MBA at some point next year, my take is that his (Dan) reasoning for what he did is two-fold. First, according to the article, his brother (Lucas) filed a lawsuit against him for his superfluous salary before Dan even initiated the 70k/year per employee benefit. Which leads to my second conclusion - Dan is a smart but cunning individual, who figured one, he could lower his salary, increase others to a flat median average throughout his company and use that for media gain - which would potentially lead to an increase in new clients from the media exposure.

By increasing his (Dan) yearly salary - he essentially robbed his brother of his % of the profits. By eventually lowering his salary - and increasing his employees, he advertently created a "hole" in which he couldn't buy out his brother's half of the company for what his brother would deem fair market value imo.

Conclusion: Smart and Cunning.

Response by COL Vincent Stoneking made Dec 10 at 2015 10:28 AM

COL Vincent Stoneking — Thu, 10 Dec 2015 10:28:52 -0500

It is counter to reason and millennia of history of how people act in groups. If you pay everyone the same, regardless of role (NOTE: NOT quite what he did, I am oversimplifying), those who perceive that they work harder/contribute more will over time either leave (even if it ultimately means taking a pay cut, counterintuitive) or lower their performance to what they believe is expected/accepted for others.

What he did was actually worse, he LIFTED lower salaries to $70K. Which means that the guy who has 23 years in the industry and feels he earned his dues to finally get a management position with a $73K/year salary finds out that he and the new 19 year old customer service rep make the same amount of money. This actively dismisses the education, experience and expertise that the Manager brings to the table. A prior article mentioned that at least several of his senior people left for exactly this reason.

Great sound bite. Especially in Seattle. Horrid idea.