20th Century Motor Company:
Well, let’s see how this company copes with “unintended consequences” of what was supposed to be an enlightened action.
I think some freepers predicted this. Of course I bet many thought it would take a little longer.
I do a lot of work with Human Resources folks. So often, I hear the “It’s not fair!” cry when I push for more differentiation. The reality is about 5% of a company’s people make the difference between success and mediocrity. You cannot afford to lose that 5%.
Didn’t take long for him to tank his business did it?
Its (mostly it turns out) his company. He can run it anyway he sees fit.
If he finds a formula to keep employees happy and run his business, then its a win-win. Good for him. I understand he’s gained a lot of new business and free publicity from his gesture.
At the same time though, seems he’s upset the harder-working employees of his firm, and put himself in a spot with profits, as well as other investors. In that case, his idea is just bad management.
Profits are necessary as the means and motive of production, and a growing productive process is necessary for economic progress, which is necessary for prosperity. A business owner should aim for high amounts and rate of profits in order to be able to save and invest more.One way to achieve high profits is to control costs by keeping wage rates at market levels and by not paying higher than market prices for capital goods.If the owner wants to reward highly valued employees, he can give them bonuses.
Has anybody explained “inflation” to these nitwits? If EVERYBODY makes $70,000 a minimum of per year, then bread goes to $10 a loaf, and apartment rent goes to $3,000 per month.
Capitalism worked!
But now people are calling it communism? CEOs shouldn't be allowed to make decisions that they think will help the company, but might in fact have th r opposite effect? If that happens, we lost capitalism?
I think I read somewhere that his brother is suing him...he is the epitome of ‘social’ feelgood politics. The same mindset that says to the Iranians “let’s be friends”, “make peace nit war”...self annihilation....
Imagine you are an exempt (salaried) employee working for this company (or any medium sized company). You are a conscientious and competent employee who never bangs in sick. You show up every day and bust your hump, working extra hours and weekends when you feel you need to. (Remember that an "exempt" employee does not qualify for overtime.)
Your efforts help the company to be successful and you are rewarded for your efforts by increased salary and promotions. After a few years, you are earning $70,000, more than 90% of the other employees in the company. But you deserve it because you earned it.
Meanwhile, your success is envied by some of your less than stellar co-workers. These workers like to gripe and complain and have a "not my job" mentality. They only turn in the minimum performance necessary and never volunteer to go the extra mile. You will not see them in the office on weekends or after 5. Some of these employees actually resent you because you make them look bad by comparison. They call you a "brown noser" and other names behind your back. But you are okay with this because you are making $70K and these chumps are always going to be stuck in the $35-40K range.
But one morning you come to work and get the memo that your CEO has decided to raise everybody's salary to $70,000. The same salary you worked so hard to attain. Is the boss raising your salary to $105,000 to compensate? No. Maybe he threw you a 10% raise to take some of the sting out of it. If you are lucky.
So now you have to deal with your co-workers, who you have picked up the slack for all these years, walking by your cubicle with knowing smirks on their faces. They are now making pretty much the same money as you and they never had to work for it.
Does that make you feel like a sucker? Does that make you feel like going home at 5:00 on the button and not giving the company anything extra from that point on? Or more likely, it will cause you to update your resume and find employment with a company that truly values your exceptional skillset. Let your current boss deal with the mediocrity that remains behind.
This CEO is a real bonehead.
This failure was predicted.
It sounds like one or two people are whiners who want to decide what other people get paid. If they are worth more than 70k, then go away and get it.
Organizations all have those annoying people who are so convinced that only they are any good and everyone else sucks.
I bet it could easily be demonstrated that the lower ranking employees motivation, loyalty, and dedication levels shot up, and that the prima ballerinas who walked were quickly replaced by someone who likes the corporate culture. And the new hires are probably just as good as the ones who walked. Talent is a dime a dozen.
“Dan Price, 31, tells the New York Times that things have gotten so bad he’s been forced to rent out his house.
“I’m working as hard as I ever worked to make it work,” he told the Times in a video that shows him sitting on a plastic bucket in the garage of his house. “I’m renting out my house right now to try and make ends meet myself.””
Brown outlook on the world. This isn’t a negative consequence, it’s Price showing his people he will live on his 70k too.
This was already done 400 years ago. Plymouth Rock. Socialism failed miserably.
It’s plain and simple common sense.