Idiot that decided to pay all employees 70K a year? Reality has its say

[zxcvbob]

Kind of hard to judge scale in that picture but that chain looks kind of puny, I don't think it would hold up to the grandson's tricycle.
 

I think that chain is only driving a small oil pump.  Not really sure...

[Tallpine]

A manly man's transmission

http://www.4wdhub.com/trans/sm420.html

My Kaiser has one of those in it.

Yeah, I had a couple of those in my 1965s: one in the two ton and one in the step side.  Nice transmissions; I think they shift better than the SM465.  I'm on my third truck with one of those.

Come to think of it, the other two ton (1958) might have had a 420 also. 

[charby]

Kind of hard to judge scale in that picture but that chain looks kind of puny, I don't think it would hold up to the grandson's tricycle.
 

Runs the hydraulic pump.

[Tallpine]

Maybe the guy should have just bought all of his employees a brand new pickup and be done with it 

[charby]

I think that chain is only driving a small oil pump.  Not really sure...

The tranny is one from a Oliver Super 88 tractor.

[Tallpine]

The tranny is one from a Oliver Super 88 tractor.

That brand of tractor used to be found oliver the mid-west 

[KD5NRH]

Maybe the guy should have just bought all of his employees a brand new pickup and be done with it 

We've been tossing the idea around here of, instead of maintaining a company fleet, putting all the sales reps and office staff on the waiting list for Elios; everybody can have their own for less than the cost of just putting the sales staff in nice looking econoboxes, and the fuel savings will be immense when you figure half the company does 500+ miles a week, with some clearing 1,000/week on occasion.  Push that over to "vehicle allowance" and give the option of having it go straight back to the company for each employee to buy their car.

Still working out the tax details of how to handle some financing the car and others just using it as a company car, but I'm hoping we go ahead with it.  90% of the driving done by sales and office staff is only one person and one seat worth of cargo, so we could get by on 1-2 trucks and 8-10 Elios without losing capability.

[zxcvbob]

We've been tossing the idea around here of, instead of maintaining a company fleet, putting all the sales reps and office staff on the waiting list for Elios; everybody can have their own for less than the cost of just putting the sales staff in nice looking econoboxes, and the fuel savings will be immense when you figure half the company does 500+ miles a week, with some clearing 1,000/week on occasion.  Push that over to "vehicle allowance" and give the option of having it go straight back to the company for each employee to buy their car.

Still working out the tax details of how to handle some financing the car and others just using it as a company car, but I'm hoping we go ahead with it.  90% of the driving done by sales and office staff is only one person and one seat worth of cargo, so we could get by on 1-2 trucks and 8-10 Elios without losing capability.

So the sales reps and office staff are Morlocks?   

[Tallpine]

We've been tossing the idea around here of, instead of maintaining a company fleet, putting all the sales reps and office staff on the waiting list for Elios; everybody can have their own for less than the cost of just putting the sales staff in nice looking econoboxes, and the fuel savings will be immense when you figure half the company does 500+ miles a week, with some clearing 1,000/week on occasion.  Push that over to "vehicle allowance" and give the option of having it go straight back to the company for each employee to buy their car.

Still working out the tax details of how to handle some financing the car and others just using it as a company car, but I'm hoping we go ahead with it.  90% of the driving done by sales and office staff is only one person and one seat worth of cargo, so we could get by on 1-2 trucks and 8-10 Elios without losing capability.

Somehow all I can think about is sharing the road with 18 wheelers in one of those 

[makattak]

So the sales reps and office staff are Morlocks?  

Very close. They'd be waiting for Eloi, not Elios. The Eloi probably taste a lot better, though.

[MillCreek]

I wonder if the Elios will ever make it to production.

[Sideways_8]

Maybe the guy should have just bought all of his employees a brand new pickup and be done with it 

I know of one concrete company that does that for their salesman. They buy the trucks and pay for all the fuel in them and the ones I have seen were top of the line trucks like a Ram Big Horn or F-150 Platinum. Whether it saves them money I don't know.


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[Tallpine]

I know of one concrete company that does that for their salesman. They buy the trucks and pay for all the fuel in them and the ones I have seen were top of the line trucks like a Ram Big Horn or F-150 Platinum. Whether it saves them money I don't know.


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A $40K pickup once versus $70K salary every year 


Plus ... it neatly ties this thread together 

[KD5NRH]

So the sales reps and office staff are Morlocks?

That would be an upgrade for sales.

Somehow all I can think about is sharing the road with 18 wheelers in one of those

Meh; no worse than any other vehicle under about 20 tons.  A fully loaded 18 wheeler or large bus will fold an F-450 into about the same size ball as it does with a Geo Metro.  Watched it happen once.  Thankfully, there was no way anybody was going to see what the Ford's occupant(s) looked like until the FD did a lot of cutting, so I was gone before they got inside.

[Sideways_8]

That's on top of salary.


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[Tallpine]

Meh; no worse than any other vehicle under about 20 tons.  A fully loaded 18 wheeler or large bus will fold an F-450 into about the same size ball as it does with a Geo Metro.  Watched it happen once.  Thankfully, there was no way anybody was going to see what the Ford's occupant(s) looked like until the FD did a lot of cutting, so I was gone before they got inside.

At least the truck drive would know he hit something.

[charby]

Looks like it working out for Gravity and pissing a few folks off.

http://www.cheatsheet.com/money-career/the-70000-minimum-wage-experiment-reveals-a-dark-truth.html/?ref=YF&tpl=op

[makattak]

Looks like it working out for Gravity and pissing a few folks off.

http://www.cheatsheet.com/money-career/the-70000-minimum-wage-experiment-reveals-a-dark-truth.html/?ref=YF&tpl=op

That article added no new information except that the company hasn't failed yet.

He just destroyed the incentive structure in his business. It's unlikely to cause immediate collapse of a already profitable business. Instead, it will manifest in slowly deteriorating quality due to an exodus of his better employees, leading to an exodus of clients.

It's great he wants to sacrifice and help out his employees. But I'm betting his noble self-congratulations will start to wane as he is putting in 120 hour weeks and sees his employees work 40 hours and go home to enjoy their families. (And he may start to understand the incentive problem at this point. I'm betting pride won't let him admit it until the company fails, though.)

[Ron]

There is no incentive to be a high performer.

Eventually the floor will be established of what the minimum amount of work is that is required to keep your job; then that is what on average the staff will end up doing.

If there is a profit sharing plan, that will inspire some to work harder and they will probably feel animosity toward those who refuse to pull harder.

Interesting experiment but I don't really think it is sustainable.

[makattak]

That article added no new information except that the company hasn't failed yet.

He just destroyed the incentive structure in his business. It's unlikely to cause immediate collapse of a already profitable business. Instead, it will manifest in slowly deteriorating quality due to an exodus of his better employees, leading to an exodus of clients.

It's great he wants to sacrifice and help out his employees. But I'm betting his noble self-congratulations will start to wane as he is putting in 120 hour weeks and sees his employees work 40 hours and go home to enjoy their families. (And he may start to understand the incentive problem at this point. I'm betting pride won't let him admit it until the company fails, though.)

Oh, I should also note he may, very likely, get better output from his employees who weren't making $70K already. Of course he had a reason he wasn't paying them that much already: the value they added to the company did not justify it. Thus, their better output is highly unlikely to be enough to compensate for the significant salary increase.

[MechAg94]

But if they were already a poor performer, working a little better still may not be to the level of better employees.

IMO, it is the better employees that make things work.  The ones who get the job done consistently, who can solve problems without constantly making the boss figure it out.  The ones who don't need to be "managed" all the time who the boss can assign tasks without worrying about it getting done right.

[Scout26]

But if they were already a poor performer, working a little better still may not be to the level of better employees.

IMO, it is the better employees that make things work.  The ones who get the job done consistently, who can solve problems without constantly making the boss figure it out.  The ones who don't need to be "managed" all the time who the boss can assign tasks without worrying about it getting done right.

The ones who are leaving because they are making the same as the mail clerk....

[charby]

There is no incentive to be a high performer.

Eventually the floor will be established of what the minimum amount of work is that is required to keep your job; then that is what on average the staff will end up doing.

If there is a profit sharing plan, that will inspire some to work harder and they will probably feel animosity toward those who refuse to pull harder.

Interesting experiment but I don't really think it is sustainable.

$70k/year is the minimum salary for the company, not everyone only gets paid that, appears that some people will get paid more.

Earlier this year, a small Seattle-based payment processing company made headlines when its 31-year-old CEO made a rather jarring change to the company’s pay structure: Gravity Payments would pay all employees, at a bare minimum, $70,000 annually.

I think it is pissing people off because the owner decided to reduce his own salary to pay the workers more, this almost totally unheard of in the modern business environment where the top keep growing their salary by shitting on workers.

[Firethorn]

Huh.  It's mentioned that he was inspired by a study showing that ~$70k is the 'optimal' happiness point.

I think I've read that study.  The best way I can explain it is that it turns out that money doesn't buy happiness, but it sure can be used to prevent or 'pay off' unhappiness.

IE, when you're hitting ~$70k/year, you stop gathering extra unhappiness from lack of funds.

Extra money will make you happier if you're unhappy because you're having trouble meeting your bills, having to budget every dollar, etc...  If you're unhappy because you have no friends, or don't have a girlfriend or something, then more money will only provide a transitional, almost illusionary gain in happiness.

[RevDisk]

Not sure why some folks outright hate the guy. I can understand the adage of "Hire good people, pay them well". It's a good strategy, and I've seen it work. "Hire good people, pay them market or below market wages, demand above average performance" only works if you can handle high turnover or it's a terrible economy.

That said, I would have just given everyone a $20k raise instead.