A lot of the events are specific to the business discussed (the ownership structure with passive investors with preference for dividends, big-ticket customers with strong opinions).
Paying above average to increase retention rate is not new. Henry Ford pioneered it for automated assembly line, Costco pays above average compared to others in retail, tech companies attempt to lock in four-year commitments by issuing stock options.
The idea is that the company gets competitive advantage by minimizing employee onboarding/training costs and maximizing said employee's productivity. For some industries it's a good bet, for others not.
I think this makes an interesting observation, but I don't agree with the conclusion about "crab mentality".
Flip it into an experience that many people experience in their lives, they buy product X and they pay $Y for it, then due to circumstances they don't control, the seller decides to start selling that product at $Y-$Z dollars, a big discount. The original buyers feel "ripped off" because the seller changed how they valued the product, without changing the product.
There has to be a real name for it, but I call it value dissonance. Where the value you assign to a good or service is suddenly different than the market value. Everyone who bought a house in 2007 experienced it in 2009 :-(.
Work output is just as much a good or service. And you consciously or unconsciously assign a value to it based on what other work around you "gets" as salary. So if you change what you pay one set of people but not everyone, you introduce this dissonance. And it can be hard to process.
4 comments
[ 5.6 ms ] story [ 18.1 ms ] threadhttp://www.cheatsheet.com/money-career/the-70000-minimum-wag...
Paying above average to increase retention rate is not new. Henry Ford pioneered it for automated assembly line, Costco pays above average compared to others in retail, tech companies attempt to lock in four-year commitments by issuing stock options.
The idea is that the company gets competitive advantage by minimizing employee onboarding/training costs and maximizing said employee's productivity. For some industries it's a good bet, for others not.
Flip it into an experience that many people experience in their lives, they buy product X and they pay $Y for it, then due to circumstances they don't control, the seller decides to start selling that product at $Y-$Z dollars, a big discount. The original buyers feel "ripped off" because the seller changed how they valued the product, without changing the product.
There has to be a real name for it, but I call it value dissonance. Where the value you assign to a good or service is suddenly different than the market value. Everyone who bought a house in 2007 experienced it in 2009 :-(.
Work output is just as much a good or service. And you consciously or unconsciously assign a value to it based on what other work around you "gets" as salary. So if you change what you pay one set of people but not everyone, you introduce this dissonance. And it can be hard to process.
No doubt it can be hard to process, but that doesn't mean it's not a case of zero sum mentality.