In March 2015, Price brought in a new pay policy. According to the New York Times, Price’s goal was to “raise the salary of every single person at the company to $70,000.” Even more unusual is the way that Price is funding the pay increase: he cut his pay to $70,000 from nearly $1 million a year. Price was inspired to implement the policy after learning about the emotional well-being and benefits of earning at least $70,000. Prior to this change, the average pay at the company was $48,000 per year. There are several lessons we can draw from Price’s example and the impact he has made on the lives of his employees. First, he has shown a willingness to sacrifice his own gain for the company’s success. Second, he has shown that he knows how to motivate others – simply put, it is difficult to get by in America with a low income. Finally, we can also take heart that business leaders are able to contribute solutions to the income equality problem. Rather than placing all our hopes on government, Price’s decisions and leadership show that companies can earn a profit and help people make a good living at the same time. Each and every organization and company can make the world a better place by adopting better policies on pay, benefits and related issues. Outside of the challenge of leading a company, what lessons can we learn from Dan Price and Gravity Payments? Consider the following ideas and suggestions to improve your leadership.
1. Respect the market, but make your own decisions
Price has remarked that CEO salaries are very high. Despite that fact, he can choose to act differently from the market in order to address a greater challenge – income inequality. This is another way of emphasizing the importance of being proactive in business decisions, rather than becoming a victim of market forces.
2. Strategic self-sacrifice increases credibility
Putting your money where your mouth is can improve your credibility. Dan Price demonstrated this idea by reducing his own income to fund a pay increase. In a non-profit situation, you might choose to avoid using all of your benefits to help the organization get through a crisis. However, one must be strategic in such a decision. Otherwise, you may earn a reputation as someone with a doormat personality. Tip: Looking for ways to improve your professional credibility? Consider writing a book about your area of expertise. Many companies and professional speakers have grown their incomes and careers after publishing a book.
3. Recognize that money improves happiness but only to a point
To a degree, earning more money really does improve your happiness and comfort. For example, if you are earning $20,000 per year as a student and later increase your income to $65,000 as a professional, you will probably be happier. According to a 2010 study, “Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000.” Tip: Money can improve your happiness if you use it thoughtfully. That’s why successful people use money to buy experiences, rather than more material possessions.
4. Read to lead to improve your leadership
Dan Price was inspired to change his company’s pay policy after reading research about income and happiness. You can grow yourself by reading. For example, you can learn career hacks from George Washington. Fortunately, there are many great books for leaders on the market. Start by going through this list: 15 Inspiring Books Every Leader Should Not Miss. Featured photo credit: Money/Markgraf-Ave via pixabay.com
