In the month of April 2015, Dan Price, the CEO and establisher of Gravity Payments, a private credit card processing and financial services organization, declared that every employee would attain a minimum yearly salary of US$70,000 throughout the next three years.
Price said he was anxious concerning the raising pay difference in the USA and news of his bold move went viral, causing disagreement over employee compensation strategies along with the wealth disparity in society.
At first, there was applause for his extreme actions, causing an initial growth in innovative company. Nonetheless, there was nearly an instant backlash both internally and externally. One senior worker at the firm resigned, claiming that lesser-skilled workers would only clock in and out while highly skilled workers were not likewise compensated with raises. A lawsuit was filed by the brother, a minority shareholder, who believed that the company would affect the Price. Gravity Payments were left by numerous clients while other companies criticized the move, saying it made them appear stingy. Price tried to handle pay inequality by raising wages, but this created controversy. Employees were not the only stakeholders affected by the actions of Price. What should Price do?
PUBLICATION DATE: January 21, 2016 PRODUCT #: W16013-HCB-ENG
This is just an excerpt. This case is about LEADERSHIP & MANAGING PEOPLE
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