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7/25/2019 Gravity Payments Salary Analysis
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Case:
Gravity PaymentsFloor Salary
Team 12:
Kevin Pfeifer, Guido Perez, Ghanshyam Thakkar,Helen a!ata, Feli!e "#$llister, Kelly %i&olini
'Ge(islittl*eli$mis )
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ntrodu#tion
Founded in 2--.
Private Com!any
C/0 and Founder: an Pri#e
ndustry Se#tor: ankin& 3Finan#e
4um*er of em!loyees: a*out1--
Produ#t: Credit #ard !ro#essin&
%evenue: 5 16- "illion 72-1.8
Pro9t: 5 2+2 "illion 72-1.8
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Case
2-16: C/0 an Pri#e de#ided to #han&e the !oli#
Floor salary of 5 -,--- for all em!loyees *y 2-1
Some em!loyees rea#hed a dou*led salary
$ll em!loyees )ith a salary over 5 -k didn;t &et in#reasin&
Pri#e;s idea #ame from a study *y $n&us eaton Kahneman
Threat that em!loyees are fa#in& in terms of lon&motivation
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Positive/?e#ts
Pro9ts has *een dou*led sin#e the announ#eme
Customer retention rate &ro)s from A1B to A6B
Ha!!iness of em!loyees has &enerally in#rease
Gravity Payments is no) #onsidered to o?er ve#om!etitive #om!ensation !a#ka&es that allo)em!loyees to maintain a hi&her standard of livi
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4e&ative/?e#ts
Short term sa#ri9#e
Some #lients )ere u!set *y the !oliti#al messa&e thindi#ates and feared that !ri#es )ould in#rease
Sha#kles hi&h !erformers to less motivated em!loy
Former em!loyees are not ha!!y )ith in#ome distri
ue to hi&h salary hike, their o)n !ro9t of 52+2" )dedi#ated to the salary in#reases
Com!any more #harity than !ro9t orientated D *aat
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4e&ative/?e#ts
His o)n *rother, Eu#as !ri#e, -B sharehold#om!any suin& him
Cut do)n his o)n salary of 51 million to 5-
He has to mort&a&e his )on house to !ay hem!loyees a !ay#he#k+
;s it fair=;, "ana&ers say
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/uity Theory
/m!loyees )ho )ere very e(!erien#ed )ere unhtheir salaries )ere not in#reased as mu#h as those(!erien#e+
Some entry level em!loyees feel that they have nthe raises they have *een &iven+
The !erforman#e of em!loyees in#rease *ased on!er#e!tion of euality amon& the em!loyees and
Con#lusion
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/uity Theory
The euality measure #omes a*out ho) mu#h e(e?ort and skills you have related to the salary, re*ene9ts the #om!any &ives to em!loyees+
This !oli#y #han&e is disru!tin& the normal hierarem!loyees are ha!!y for no) )ith their raises, inem!loyees )ill *e frustrated as the foundations otheory states this+
Con#lusion
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Herz*er& Theory
4e) salary o?ered *y Gravity Payments is a*ove standard+
/ven *efore the !oli#y, hy&iene fa#tors of the em*ein& met and !oli#y #han&e #aused strain on emsatisfa#tion+
Hy&iene fa#tor only kee! em!loyees from *ein& doesn>t ne#essarily motivates themI
They didn>t try to 9nd out a#tual #ause of dissatisem!loyees if any+
/ven if they in#rease the salary, they mi&ht *e un*e#ause of motivation fa#tors of Herz*er& theory+
Con#lusion
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%e#ommendation
The minimum salary should rea#h the 5-,--- *utto &et this amount )ill de!end on your !erforman
Gravity Payments should introdu#e a &raduated !aallo)s em!loyees to ui#kly move u! the salary laearn e(!erien#e+
The ne) minimum salary #an *e a !romise )ithin amount of time and allo)s the em!loyee to earn t#om!ensation )ithout u!settin& more e(!erien#ed
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%e#ommendation
/very sin&le Jo* !osition !erforman#e should *e m#orre#tly and eventually the salary risen to 5-,--
0n#e on the 5-,--- a##ordin& to the euity theor
Payments should in#lude a *onus to make sure the#ontri*ute the more *ene9t you &et+
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