Mac-Donald Ukata Written by Mac-Donald Ukata · 1 min read >

Gravity payment is an interesting case because it is not something you think would happen in the business world. In 2015, CEO of Gravity Payments Dan Price introduced his plans to elevate the minimum salary of his personnel to $70,000 USD over the subsequent three years. Dan Price made this call after analyzing a happiness study examined by Princeton university that said personnel wellness and happiness rose with-profits will increase up to $75,000 USD consistent with the year (at which factor profits stopped affecting happiness.

The CEO dramatically decreased his revenue from $1 Million USD to $70,000 USD to be at the same level as his colleagues. A lot of the staff were happy while small was sad for different reasons. Some did not like that their salaries were made public, some felt there was no matrix for success as everyone was pegged at the same salary and of course, many were happy as it meant that they could clear their debt, student loans, etc. He had issues with his brother who was also a stakeholder in the business as his brother felt he should have been consulted before making such a decision. The customers started having doubts about his business as they all thought the salary adjustment was not sustainable for the business. The problem question of the case is what Dan Price should do to deal with reactions from the company’s employees, customers, media, and his brother.

The different groups came up with some presentations which in my opinion all had the same idea in terms of prioritizing the opinion of the brother and the customers and giving lesser priority to how the media and staff would react. Dr. Anibaba emphasized that she had gotten feedback from students saying this cannot happen in Nigeria, she said that they had the same thought that it could not happen in the United States either and it did. One of my arguments with her was that he did the salary review from a place of emotion because I felt thought he cared enough about the welfare of his staff to make that decision. She argued it was not the case, in fact, it was an objective decision. She was of the school of thought that the decision was made because he could afford it. She also asked that if we go through the case, we would see that it was stated that a minimum of $75,000 USD is needed wage to guarantee happiness however he decided to pay $70,000 USD meaning he thought through the numbers before making the decision.

It was finally reviewed that the story is in fact a real-life story and the business is story running contrary to professors and business analysts suggesting that the business plan was not sustainable and would fold up. It just goes to show the power of understanding the numbers and how having good workers who are passionate about their career ensures that the business is successful.

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