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Praise and Skepticism as Gravity Executive Sets Minimum Wage to $70,000 a Year

Praise and Skepticism as Gravity Executive Sets Minimum Wage to $70,000 a Year | Change Leadership Watch | Scoop.it

While the overwhelming majority of the responses on social media and elsewhere were positive, there were also a number of people, [executives] who expressed doubts related to the nature of pay and compensation.

Excerpts:

 

Sandi Krakowski, an author and Facebook marketing expert, posted on Twitter: “His mind-set will hurt everyone in the end. He’s young. He has a good intent, but wrong method.”
    

Patrick R. Rogers, an associate professor of strategic management at the School of Business and Economics at North Carolina A&T State University, wrote in an email: “The sad thing is that Mr. Price probably thinks happy workers are productive workers. However, there’s just no evidence that this is true. So he’ll improve happiness, only in the short term, and will not improve productivity. Which doesn’t bode well for his long-term viability as a firm.”
     

Perhaps the most prominent attacker was Rush Limbaugh, the right-wing radio host, who labeled the move “pure, unadulterated socialism, which has never worked.”

    

Most critics were not as ideological as Mr. Limbaugh but were nevertheless put off by Mr. Price’s deviation from trusting in the market, both to set wages (his own as chief executive and that of his employees) and to maximize his own profits. Overpaying workers may make them lazy and is likely to inspire resentment among colleagues who once sat on the higher end of the pay divide, they warned.

During an interview with Mr. Price on MSNBC’s “Morning Joe,” the co-host Mika Brzezinski noted that people would probably say “you’re a terrible manager.”

Another guest, Sam Stein, an editor at The Huffington Post, was simply flummoxed. “Are you crazy?” he asked.

Maybe, Mr. Price conceded.

Deb Nystrom, REVELN's insight:

Originally I mentioned that this case would be a good test of Herzberg's theories about pay, satisfaction and productivity.  I posted later that I stood corrected, when I heard he was taking a pay cut of 90% to help fund the salary increases.  
      

On the one hand, he is a change leader because of the message he is sending about executive pay, and because of his boldness to be "crazy" and to experiment in this way.  On the other hand, it will be a good test of the limits of pay, and the theories and research that show that happiness and productivity are not necessary in the same room together.  Or perhaps they can be.  Check out a sample of Mihaly Csikszentmihalyi's slides I captured at his University of Michigan presentation this month.


Jonsson, CEO & co-founder of Jumpstarter describes Flow as

a state of mind where you are immensely focused and get things done. It is those precious moments when you are productive and ecstatic at the same time.  It is achieved by clearing the mind from the mind clutter. Mind clutter could be thoughts, feelings and impressions. Clearing it is achieved by actively working with accepting emotions, addressing problems when they arise and seeing things as they are.


”Flow-stoppers” are all those things that create mind clutter. It could be anything from deadlines to personal relationships to putting pressure on oneself to perform and do well.


Time will tell. He continues as a potential change leader, nonetheless for shaking things up.  ~  Deb

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Competitiveness Talks: Walmart plans to give raises to 40% of its workers

Competitiveness Talks:  Walmart plans to give raises to 40% of its workers | Change Leadership Watch | Scoop.it
Walmart is planning to give 40% of its employees pay raises.

 

As part of its biggest investment in worker training and pay ever, Walmart told The Associated Press that within the next six months it will give raises to about 500,000 workers, or nearly 40% of its 1.3 million U.S. employees.

Walmart follows other retailers that have boosted hourly pay recently, but because it's the nation's largest private employer, the impact of its move will be more closely watched.
 

...At the same time, competition for retail workers is becoming increasingly stiff. As shoppers get more mobile savvy, retailers are seeking sales staff that's more skilled at customer service. But in the improving economy, the most desirable retail workers feel more confident in hopping from job to job.

   

Wal-Mart's plans [include]:
    

  • [Raise] entry level wages to at least $9 an hour in April and to at least $10 an hour by February of next year. ...Sam's Club locations will offer a starting hourly wage of at least $9.50 or higher in all markets, and at least $10.50 by next year.
         

  • Raise the floor and ceiling of its pay range for each position in most stores. For example, the pay range for cashiers is $7.65 to $16. The new range will be $9.00 to $17.55.
          

  • Raise the starting wage for some department managers to at least $13 an hour by this summer and at least $15 an hour by early next year. 

As for all Scoops, click on the photo or title to see the full article.

Related change & performance posts by Deb:

 

           

       

    


  • Stay in touch with the monthly Best of the Best news, taken from Deb's 9 award winning curation streams.  Preview it here, via REVELN Tools.
Deb Nystrom, REVELN's insight:

From the article, it sounds like Walmart, the organization that is so huge, it impacts the entire US economy, is open to advice from their advisers.  Those include Ed Lazear, a Stanford University economics professor, who said, "It's positioning itself to be competitive."  "This is a step in the right direction."
  
So they help their poor image and become more competitive, as the labor market rebounds.   ~  Deb

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KSU prez gives up $90K of his own salary to give lowest-paid employees a raise

KSU prez gives up $90K of his own salary to give lowest-paid employees a raise | Change Leadership Watch | Scoop.it
"This is not a publicity stunt," he said. "You don't give up $90,000 for publicity. I did this for the people. This is something I've been thinking about from the very beginning."


The raise in pay for those employees will stay in place even after a new president is selected, he said. It will be the rate for all new hires as well. The change is immediate.


His salary, originally $349,869, is now $259,745.

Deb Nystrom, REVELN's insight:

The lead line for the article is, "Now this is leadership."  Perhaps the difference in his before and after salary, and his prior role with GE have inspired him to make an example that may inspire others.


When is a certain level of salary, house, home and possessions enough - so that those with wealth share it with those who struggle to make ends meet?


It reminds me of the video circulating about the homeless sharing their food and money that has been given to them recently, while the average American does not share when asked by someone for food or money.  ~  D

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Costco's Profit Soars As Low-Wage Competitors Struggle

Costco's Profit Soars As Low-Wage Competitors Struggle | Change Leadership Watch | Scoop.it
At a time when other retailers are struggling to get people into stores, Costco is enjoying a moment in the sun.



For its part, Costco, or at least many of its officials, would like to see the company's practice of paying employees well put into law. The company’s CEO, Craig Jelinek, said earlier this year that he supports President Barack Obama’s proposal to raise the minimum wage, even arguing that lawmakers should boost it to $10 per hour.



Deb Nystrom, REVELN's insight:

Membership fees and merchandising, two central parts of Costco's business model, are built upon good wages, an average of around $45K to Sam's Club $17K.  No wonder there are staffers at Costco that have been there over 5 years compared to the churn at other much lower wage competitors.   Henry Ford anyone?  ~  D

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CEO cuts his own pay by 90% to give every employee a huge pay rise

CEO cuts his own pay by 90% to give every employee a huge pay rise | Change Leadership Watch | Scoop.it
A chief executive has announced plans to raise the salary of every single employee at his company to at least $70,000 (£47,000) – and will fund it by cutting his own salary by 90 per cent.

     

Mr Price, 30, has gone one step further, after telling ABC News he thought CEO pay was “way out of whack”.
    

In order not to bankrupt the business, those on less than $70,000 now will receive a $5,000-per-year pay increase or an immediate minimum of $50,000, whichever is greater.
    

A spokesperson for the company said the average salary was currently $48,000, and the measure will see pay increase for about 70 members of staff.

    

...

“My pay is based on market rates and what it would take to replace me, and because of this growing inequality as a CEO that amount is really high. I make a crazy amount.
     

The New York Times, which was invited along for the Wolf of Wall Street-esque announcement, reported that after the cheering died down Mr Price shouted: “Is anyone else freaking out right now?”

Deb Nystrom, REVELN's insight:

Now here's a guy who's sending out a big message about executive compensation, along with wage fairness.  This is beyond the thoughts I had shared about wage / pay and motivation, a 'la Frederik Herzberg.   ~  Deb

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WinCo, ‘Walmart’s Worst Nightmare’ Is Expanding Massively

WinCo, ‘Walmart’s Worst Nightmare’ Is Expanding Massively | Change Leadership Watch | Scoop.it
Both Walmart and Costco have reputations for operating stores with minimal staffing—an obvious cost-saving tactic—and WinCo also tries to maximize efficiency in terms of hires and employee hours. While Walmart doesn’t have a particularly good reputation in terms of hourly wages or an ability to keep workers for the long haul, Costco is known to pay workers well, provide good benefits, and, by no coincidence, have great customer service thanks to the fact that employees who stick around for years and obviously want to keep their jobs. Likewise, few WinCo employees complain about their gigs. The company is employee owned, each owner (worker) is entitled to a pension, and health benefits are provided to anyone working at least 24 hours per week.


Related change posts by Deb:
 

      
   


Deb Nystrom, REVELN's insight:

Keep an eye on this company.  Let's see if they can make make it work with expansion.  As a "good business" company, it is encouraging if they can model sustainable livelihood for workers and including pensions and health benefits.

We needs more of these types of companies to turn the tide of increasing poverty in the USA.   ~  Deb 

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Workers fight for culture, wages and win: Demoulas, reinstated as CEO, Market Basket

Workers fight for culture, wages and win: Demoulas, reinstated as CEO, Market Basket | Change Leadership Watch | Scoop.it

Boston Herald: TEWKSBURY, MA — Arthur T. Demoulas was reinstated as CEO late last night after a two-month standoff over his firing that saw rank-and-file workers walk off their jobs and customers jump to competitors in protest — thanked his workers this morning, hours after his historic purchase of the company.

   

______________

  

“You taught everybody that Market Basket is a place where respect, honor and dignity is a way of life.” ~ Arthur T. Demoulas, reinstated CEO, Market Basket

______________

      


"You are simply the best,” Demoulas said …There is very little I can ever add to your brilliant work…and the power of your enduring human spirit over the past six weeks.”

    

Early this morning, a massive fleet of delivery trucks lined up ready to roll and hundreds of ecstatic employees reported to work for the first time in weeks....heralding the return of a boss they said had provided generous pay and benefits and a culture of respect for workers.


“You taught everybody that Market Basket is a place where respect, honor and dignity is a way of life,” Demoulas told his workers. “You displayed your unwavering dedication and desire to protect the culture of your company...You have demonstrated that everyone has a purpose....that no one person holds a position of privilege.”

   

The chain employs 25,000 workers in Massachusetts, Maine and New Hampshire.  [It was worth] $4 billion before Arthur T.’s June 18 firing touched off a customer boycott and employee walkouts.  [It] racked up millions in losses and shelves were left empty due to a halted supply chain.

   

Demoulas said he hopes to take less than two weeks getting shelves restocked and stores back to some semblance of normalcy.


Click the title or photo to see the full story.

    

Related posts by Deb:

    

Revelation, Leadership Integrity at All Levels

    

Company Priorities Reveal People Values and Forecast Long Term Profitability

      

6 Steps Beyond Industrial Age Performance Appraisals

    

Think like an Entrepreneur: Be Anti-Fragile No Matter Where You Work

   

  • Stay in touch with the monthly Best of the Best news, taken from Deb's  multi-gold award winning curation streams.  Preview it here, via REVELN Tools.

        

  • Are you local to SE Michigan?  Find out more about horse-guided leadership development sessions (no fee demos) for individuals by contacting Deb, after reviewing her coaching page here.  
Deb Nystrom, REVELN's insight:

I haven't heard of a worker celebration like this since Henry Ford doubled wages and in effect, created middle class prosperity. Maybe more companies will take notice of employee ownership successes like these, also like Costco and Zingerman's in Ann Arbor.

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Deb Nystrom, REVELN's curator insight, August 28, 2014 12:49 PM

I haven't heard of a worker celebration like this since Henry Ford doubled wages and in effect, created middle class prosperity. Maybe more companies will take notice of employee ownership successes like these, also like Costco and Zingerman's in Ann Arbor.

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What Makes Costco One of America’s Best Companies

What Makes Costco One of America’s Best Companies | Change Leadership Watch | Scoop.it
The Motley Fool - Costco is one of the 25 Best Companies in America.


The case for Costco
Costco has been lionized as "the Anti-Walmart" for its long policy of paying all employees a living wage and good benefits, including health coverage. In 2005, The New York Times claimed the average pay for Costco employees was 42% higher than Wal-mart's Sam's Club warehouse.


In 2008, Slate reported that after five years, a cashier makes about $40,000, and that workers pay only about 12% of health care costs out of pocket.


Any kind of job at Costco can also turn into a career thanks to the company's policy of hiring from within.


Wall Street, predictably, hates this. According to them, employees should be paid the least possible so that returns can accrue to shareholders.


In 2004, Deustche Bank analyst Bill Dreher famously complained that at Costco, it's better to be an employee than a shareholder.


Well, if Bill Dreher was a shareholder in 2004, I hope he didn't sell. Between January of 2004 and 2013, Costco shares more than quadrupled market returns, returning 180% to the S&P 500's 40%.


...The Foolish bottom line
Over 30 years, ...Costco has defied Wall Street "wisdom" through generosity to employees and devotion to customers, making investors rich along the way.

Deb Nystrom, REVELN's insight:

Visit Sam's Club & visit Costco. Notice the difference in the vibe from the staff. ~ Deb

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