They say money can’t buy happiness, but according to studies, $70, 000 can’t hurt.
Research conducted by Princeton University is what CEO Dan Price of Gravity Payments, a Seattle-based credit card processing company, decided to use as a model for his own life.
On April 13. Price announced to all 120 Gravity Payments employees he would be raising the firm’s minimum wage to $70,000 per year. The money would come from a $930,000 pay cut from his salary.
After reading the Princeton study which linked emotional well-being to rise in income – but only to a limit of around $75, 000 — he focused on bringing income equality to his workforce.
Price says the change in income is an experiment, measuring its success based on the satisfaction of his clients.
“If employees are happy they are productive so that was probably one of his motivators,” said Deb McCarthy, outgoing vice-president of Human Resources at Humber College.
At Humber, McCarthy says the value put on employee satisfaction is no different.
“We do a number of things to ensure our employees are satisfied. We’ve recently done an employee engagement survey where we actually had 70 per cent of our full-timers respond,” she said. “Overall, the results were very, very positive.”
McCarthy says that the new Learning Resource Commons building, which will house a number of faculty and staff, is one of many strides being made to improving and ensuring employee satisfaction at Humber.
“You can always improve – I’ve been involved in HR for over 30 years and I’d say every employee survey says you need to communicate more, you need to handle change better,” McCarthy said. “We’d be no different than anyone else on that.”
Samantha Ortiz, a first-year student in Human Resources at Humber Lakeshore, says although Price’s drastic decision can encourage a positive change, she doesn’t expect other companies to follow suit.
“This is a strategic decision for Dan because he is investing in his employees and human capital is a company’s most significant asset,” she said.
“Employee satisfaction should be one of the top priorities of any company as your employees are the driving force of any business’s success,” said Ortiz. “It’s very important to me when I look for a job because if you’re not happy, your performance will suffer. When you’re happy with your job, not only do you benefit but the company does as well.”
Humber College has been selected as a Greater Toronto Top Employer and one of Canada’s Top Employers for Young People for several consecutive years. Even so, McCarthy says efforts will always continue to be made ensure a favourable work environment.
“If our employees are happy and successful, then our students are happy and successful and that’s what Humber’s all about – making our students successful,” said McCarthy.
Although Price is receiving backlash from several critics, there’s no denying this bold move has made Gravity Payments threatening to other employers as it brings attention to the CEO-to-worker pay gap.
“I think this speaks to the importance of the growing war on talent and how employers are now starting to realize the total cost of not properly remunerating employees,” said Christine McCaw, program coordinator of the Business – Marketing program in an email, alluding to lost productivity and lower quality customer service. “I applaud this bold move.”