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Dan Price

Dan Price raised the minimum salary at his company Gravity Payments to $70,000 from $34,000. This was motivated by a desire to improve employee well-being and happiness. While it generated positive media attention and new clients, it also led to backlash from lost clients and a lawsuit from Price's brother. Both positives and challenges have resulted from Price's attempt to implement a more human-centered approach to management.

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139 views12 pages

Dan Price

Dan Price raised the minimum salary at his company Gravity Payments to $70,000 from $34,000. This was motivated by a desire to improve employee well-being and happiness. While it generated positive media attention and new clients, it also led to backlash from lost clients and a lawsuit from Price's brother. Both positives and challenges have resulted from Price's attempt to implement a more human-centered approach to management.

Uploaded by

api-301221395
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 12

DAN PRICE

GRAVITY PAYMENTS
CEO & CO-FOUNDER

AGENDA
1. Introduction
2. Main Point Why Dan Price and His Salary Announcement
3. Dan Price and Four Job Responsibilities of CEOs
4. Dan Price and Human Relations Management
5. Backlash and Negatives of His Announcement
6. Positives of His Announcement
7. Conclusion
8. References

INTRODUCTION
Co-founded Gravity Payments, a credit card processing and financial services
company, in 2004

Co-founded with brother Lucas

Currently CEO

In 2008 Gravity Payments became the biggest credit card processor in Washington
State

Has 12,000 clients country wide

120 Employees

MAIN POINT WHY DAN PRICE


Raised minimum salary of employees to 70,000 dollars per year

Lowest before this point was 34,000 dollars

Why?

Read a study about happiness which stated that an income of 75,000 can make a large
difference in someone's well being

Had a conversation with a friend who earned a lower income

His goal was to pay everyone enough so they could have a good standard of living
and be able to afford to live within a few minutes of their work place

DAN PRICE AND FOUR JOB


RESPONSIBILITIES OF CEOS
1. Change

Salary increase for all employees changes traditional business and salary structure

2. Commitment

Committed to employees salary increase over three year period and significantly lowered
personal salary

Preached Main Street capitalism, won local business awards, passionately supported
community volunteer projects, and met President Obama during National Small Business
Week

DAN PRICE AND JOB RESPONSIBILITIES OF


CEOS CONTD
3.

4.

Culture

Created such a positive culture at Gravity that some took pay cuts to work there

One employee decided to forgo applying to Harvard Business School

Environment

Knowledge of the state of the work force and wages in Washington State

Personally knows many of his clients and still regularly networks with them

DAN PRICE AND HUMAN RELATIONS


MANAGEMENT
Dan Prices management style heavily reflects principals of Human Relations
Management

Focus management on people

Peoples needs are important to understanding that their efforts motivation and
performance are effected by the work they do and their relationships with those with
whom they work

Treating workers well


Dan Prices management especially reflects the principles of Elton Mayo in his
Hawthorne Study

Says employees function better with increased attention from management and when
working in cohesive groups

HOW HE FITS THIS ROLE


Gives unlimited paid time off

Employees will be happier and less stressed

Company sponsored outings and meals for employees

Improve group cohesion and happiness

Increased employee pay by 2% in response to 2% payroll tax increase applied to


those earning under $100,000 in 2013

Shows Mr. Price is informed and cares about his employees finances

Lowered his own salary from 1,000,000 to 70,000 a year to finance the wage
increase
Is even referenced by employees as very caring

BACKLASH AND NEGATIVES


Lost some longstanding employees because of flat payment structure

Some employees felt undervalued

Profits are lower than expected


Lost clients
Lawsuit from brother Lucas for managerial differences (Lucas owned 30% share)
Branded as a communist or socialist by some
Two weeks after the salary raise announcement Gravity co-founder Lucas Price filed a
lawsuit citing long standing differences

Lucas still owns a 30% share in Gravity

Put valued employees or hard working ones on part with less motivated employees

POSITIVES
Media attention

Some believe this was intentional

New clients

Accounts wont pay for another year however

By June of 2015, four months after the minimum salary announcement, 950 new clients
had signed on with Gravity.

Employees know how caring he is and are willing to put in the work for him

Former Financial planner Maisey McMaster put in 80 hour weeks leveling media and
inquiries after the announcement

CONCLUSION

Would you want to work for Gravity?

REFERENCES
All Points West, C. N. (2015, April 15). Gravity Payments CEO Dan Price of Seattle
cuts his salary to boost company's minimum wage to $70k. Retrieved from
cbcnews: http://www.cbc.ca/news/canada/british-columbia/gravity-payments-ceodan-price-of-seattle-cuts-his-salary-to-boost-company-s-minimum-wage-to-70k1.3035051
Chuck Williams, T. C. (2015). MGMT. Toronto: Nelson Education.
Cohen, P. (2015, July 31). A Company Copes With Backlash Against the Raise That
Roared. Retrieved from nytimes.com:
http://www.nytimes.com/2015/08/02/business/a-company-copes-with-backlashagainst-the-raise-that-roared.html?_r=2

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