Dan Price is the Founder and CEO of Gravity Payments. After discovering in a 2010 Princeton University Study that a salary in the $70,000 – 75,000 range was necessary for people to achieve happiness he decided to do something about the inequality in pay scales in the United States today.
He took a pay cut! And, Dan used that money and the projected profits for this year to start a three-year plan to move everyone in his company to a minimum salary of $70,000 a year. Some people may call this a social or a business experiment. I call it doing what’s right for the people Dan leads and the people that make the success of his company possible.
Dan said, “There is a moral imperative that comes with leadership to do what’s right to those that you are leading and those you have made promises to. I’m responsible, partially, to make sure they are growing and they improve.”
The worker-to-C.E.O. pay gap has exploded from a multiplier of about 20 times the typical worker’s pay in an organization in the mid 60s to over 300 times the typical worker’s pay today. It is no wonder that 75% of all American workers are not engaged in the workplace, a statistic that costs U.S. businesses over $500 billion dollars a year.
C.E.O.s around the world are saying that their people need to be more accountable. Well, it starts with the C.E.O. When someone is making 300 times their typical worker then it is more than obvious that leaders are shirking their number one responsibility; the success and wellbeing of the team of people they lead.
You don’t buy the loyalty of the people you lead. There are levels of income that people need to live a quality life. Showing you care is not buying loyalty. When you recognize the needs of the people you lead and then work to serve them and their needs relationships change. By committing to morally do what is right for his team Dan is being accountable to them at the highest level. Both Dan and the company will find that the team will want to be accountable as well
This is no experiment. Some leaders get it and others do not. Some leaders tell their people they need to be accountable and others create a place where people want to be accountable. Doing what is morally right will always trump what someone may think is best for the bottom line. And, a better bottom line will almost always follow doing what is morally right.