Saturday, August 27, 2016

258.1 - Good News: Being good to employees pays off

Good News: Being good to employees pays off

Let's tart off with some good news in the form of an update; consider it a dose of feel-good news.

Back in April 2015, Dan Price, the founder and owner of a credit card processing company called Gravity Systems, and I talked about this at the time, shocked his employees by announcing that over the course of the next three years he was going to raise the minimum pay at his company to $70,000 a year - an amount at least $22,000 above the current average at the company.
He would pay for this, he said, by cutting his own yearly salary from about $1 million to $70,000 and using 75-80% of anticipated profits.

The right wing of course hated the idea, called it nothing but a publicity stunt, labeled it "pure, unadulterated, socialism," and predicted the 130 employees of the company would soon be on welfare. It'll never work, they said, instead it would wind up serving as a case study in how socialism is doomed to eternal failure.

So as you might have guessed, the update is on how the company is doing.

Pretty good, in fact.

Business volume is up 30%. Profits are up 85%. Client retention is up. About the only thing down is employee turnover.

In fact, things are good enough this summer, the employees pitched in and bought Dan Price a car - not just any car, but a Tesla battery-operated car, the average sale price of which, perhaps significantly, is $70,000.

Remember, of course, that this is still a business. It still aims to make a profit. But what Dan Price has shown is that consciously and deliberately being good to your employees - in fact, being very good to them - is not the losing proposition we're usually told either directly or by implication that it must be and that it is possible to run a successful, profit-making business without turning into an amoral, soul-dead greed hog or a smirking little prig. It's just that is usually does.

Dan Prince's success is good news.

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