A
Sample Case Study Paper On Gravity
Payments Company.
“Format:
Not to exceed 12
typed pages (minimum type Font 12). Reminder: These are
general guidelines to establish consistencies, key factors, creativity, and
continuity among the responses. Be Creative !!
Team: There maybe class presentations and group discussions
Grading: This Case Study will be a component of the “Final Grade.”
REQUIREMENT:
Research: Conduct your own research on the Gravity Payments Company.
Identify
references at the end of your case study assignment submission.
Thoroughly
read and review all documents provided as part of the Case Study assignment
Prepare
a ‘Cover Page’ with full name, case study title, date, and page #s at the bottom.
Prepare
a summary ‘Introduction’ paragraph describing Dan Price, CEO Gravity Payments,
the company credit card services and the minimum $70,000 annual wage proposal
implementation.
COMPLETE
A “SWOT” ANALYSIS – Refer to guidelines provided in the assignment.
Research: (continued)
Utilizing
the concepts discussed in class, your academic background, and personal
experiences prepare comments describing concept development, planning, and
implementation of the Gravity Payments minimum $70,000 annual wage concept for
all employees.
If
applicable, (comment), organizational behavior, diversity in organizations,
attitudes of job satisfaction, emotions and moods, motivation concepts,
understanding work teams, leadership, communications, etc.
Reminder –
Complete a ‘conclusion’/’your thoughts’ on Gravity Payments project.
Reminder –
Complete a list of ‘references’ that you utilized for this case study.
Gravity
Payments Case Study
Dan
Price, CEO Gravity Payments
Dan
Price proposed and implemented a new minimum wage of $70,000 per year for
all
employees over a period of a short few years (reported 3 years).
120
employee staff (Total Gravity Payments employment).
Dan
Price founded the Seattle based credit card processing firm in 2004 at age 19
Dan
Price would cut his salary from @$1 million/year to $70,000/year.
Gravity
Payments would use 75-80% of the anticipated $2.2 million annual profits
(funding).
The
average salary of Gravity Payments employees was @$48,000/year.
@
70 employee salaries will grow their annual incomes.
@30
employees salaries ultimately would double.
Gravity
Payments Case Study
Congress
in 2010 required SEC wage ‘filing ratios’.
At
the time, pay gaps of CEO’s to employees was 300 to 1
At
the time, recommendation was 20 to 1
A
‘web developer’ left the company rather than take a $9,000/year pay increase.
Gravity
Payments annual revenue was $6.5 billion in transactions from 12 businesses.
Dan
Price, CEO Gravity Payments had an ‘entrepreneurial spirit’.
Dan
Price lead his brother’s business success at ‘Personality Plush’.
The
2008 recession almost closed Gravity Payments.
The two largest client businesses of the 12 businesses went into
bankruptcy. This eliminated 20% of
revenue in two weeks. As a result, there
were ‘no layoffs’ and ‘no price increases’.
Gravity
Payments Case Study
Case
| HBS Case Collection | August 2015 (Revised March 2017)
The
$70K CEO at Gravity Payments
By Mitchell Weiss, Michael I. Norton, Michael
Norris and Sarah McAra
Abstract
In
2015, Gravity Payments CEO Dan Price
took a massive pay cut to raise the minimum
wage at his company to $70,000
annually. In the wake of a
national discussion of
wage equality, he was met with cheers and
jeers. The company hoped that the
unorthodox move
would, through a range of levers, cover the
increasing costs of compensation.
Did Price make the
right move? Would Gravity thrive or even
survive?
Gravity
Payments Case Study
Dan
Price took a walk in the woods with a friend who was struggling to live on less
than $50,000, about a million dollars below what he was making. Some two weeks later, he instituted his
minimum wage of $70,000 and challenged other entrepreneurs to follow him.
CREDIT: John Keatley
Gravity
Payments Case Study
Before
Dan Price caused a media firestorm (https://www.inc.com/ilan-mochari/gravity-payments-minimum-salary.html) by establishing a $70,000 minimum wage at his Seattle
company, Gravity Payments (https://www.inc.com/profile/gravity-payments)... Before Hollywood agents, reality-show producers, and
book publishers began throwing elbows for a piece of the hip, 31-year-old
entrepreneur with the shoulder-length hair and Brad Pitt looks… before Rush
Limbaugh called his a socialist and Harvard Business School professors asked to
study his radical experiment in paying workers… an entry-level Gravity employee
named Jason Haley got really pissed off at him.
It
was late 2001. Haley was a 32-year-old
phone tech earning about $35,000 a year, and he was in a sour mood. Price had noticed it, and when he spotted
Haley outside on a smoking break, he approached. “Seems like something’s bothering you,” he
said. “What’s on your mind?”
“You’re
ripping me off,” Haley told him.
Gravity
Payments Case Study
Price
was taken aback. Haley is shy, not prone
to outbursts. “Your pay is based on
market rates,” Price said, “If you have different data, please let me
know. I have no intention of ripping you
off.” The data doesn’t matter (https://www.inc.com/erik-Sherman/cutting-through-the-hype-over-minimum-wage-increases.html), Haley responded:
“I know your intentions are bad.
You brag about how financially disciplined you are, but that just
translates into me not making enough money to lead a decent life.”
Price
waked away, shocked and hurt. For three
days, he groused about the encounter to family and friends. “I felt horrible,” he says. “Like a victim.” An entrepreneur since he was a teen, Price
prided himself on treating employees well at Gravity, which he co-founded in
2004 with his brother Lucas Price. Three
years before, as a 16-year-old high school kid, Dan Price saw bar owners being
gouged by big financial firms every time they swiped a patron’s credit
card. By first outsourcing technology,
and then building its own systems, Gravity offered lower prices and better
service, and grew rapidly for four years – until the Great Recession nearly
wiped it out.
Gravity
Payments Case Study
Traumatized,
Price kept a lid on wages even after the economy recovered – to save the
company, of course! Why can’t employees
see that? Yet the more people tried to
cheer him up about his wage policy, the worse Price felt.
Finally,
he realized why: Haley was right – not
only about being underpaid, but also about Price’s intentions. “I was so scarred by the recession that I was
proactively, and proudly, hurting my staff,” he says. Thus began Price’s transformation from
classic entrepreneur to crusader against income inequality, set on
fundamentally changing the way America does business. For three years after his face-off with
Haley, Price handed out 20 percent annual raises. Profit growth continued to substantially
outpace wage growth.
Gravity
Payments Case Study
LEADERSHIP
3
Years ago, this boss set a $70,000 minimum wage for his employees – and the
move is still paying off
Michael
Wheeler | 1:10 PM ET Tue. 29 Aug 2017
Mat
Hayward | Getty Images
Gravity
Payments CEO Dan Price
Gravity
Payments Case Study
LEADERSHIP
3
Years ago, this boss set a $70,000 minimum wage for his employees – and the
move is still paying off
Michael
Wheeler | 1:10 PM ET Tue. 29 Aug 2017
There
had been bumps in the road, notably a dispute with his brother who also held
some Gravity stock. Two experienced employees quit, because their raises
weren’t as big as those for people lower on the scale. A few customers cut their ties, as well.
The
upside, though, was far greater. The
publicity landed Price many new customers.
Revenue and profits went way up, plus Price was flooded with thousands
of applications from talented job candidates.
Another
year has passed, so now it’s time to check in again. The news continues to be strongly positive on
two different fronts. On the business
side revenue continues to grow, as the company has rapidly expanded its
customer base. The number of employees
has climbed by 40 percent.
I
recently asked Ryan Pirkle, Gravity’s head of marketing, how it is that they
prosper, in spite of their higher labor costs.
“We don’t compete solely on price,” he said, (though they charge
significantly less than the industry average.)
Management
of Organizational Behavior
Identify
the specific problem (be concise)
Develop
the SWOT Analysis
S =
Strengths
W = Weaknesses
O =
Opportunities
T =
Threats (internal and external)
Evaluate
potential alternative strategies (be concise).
Make
a decision on the preferred alternative (short and long range).
Specify
your ‘Individual’ and/or ‘Partnership’ decision.
Answer
additional questions (if required) for the Case Studies.
Management
of Organizational Behavior
Format:
Refer
to class case study assignment guidelines.
Load
assignment into the WSU Blackboard System.
“Clarity”,
“Format”, “Creativity”, “Presentation”, and “Analysis.”
Check
grammar on all pages.
Remember
– These are general guidelines to establish consistencies and continuity among
the responses (assume a leadership position).:
Team: Instructions will be provided for ‘individual’ or
‘team/group’ assignments.
Review: Case Studies will
be presented by the individual or team during class.
Case Study responses should emphasize
“Timeliness,” “Thoroughness”.
SWOT
S_Strength W_Weaknesses O_Opportunities T_Threats
SWOT
analysis helps the business to identify its strengths and weaknesses, as well
as understanding of opportunity that can be availed and the threat that the
company is facing. SWOT for The 70K
CEO at Gravity Payments is a powerful tool of analysis as it provides a
thought to uncover and exploit the opportunities that can be used to increase
and enhance company’s operations. In
addition, it also identifies the weaknesses of the organization that will help
to be eliminated and manage the threats that would catch the attention of the
management.
This
strategy helps the company to make any strategy that would differentiate the
company from competitors, so that the organization can compete successfully in
the industry. The strengths and
weaknesses are obtained from internal organization. Whereas, the opportunities and threats are
generally related from external environment of organization. Moreover, it is also called Internal-External
Analysis.
SWOT
S_Strength W_Weaknesses O_Opportunities T_Threats
STRENGTHS:
In the strengths, management should identify the
following points exists in the organization:
Advantages of the organization
Activities of the company better than competitors.
Unique resources and low cost resources company
have.
Activities and resources market sees as the
company’s strength.
Unique selling proposition of the company.
WEAKNESSES:
Improvement that could be done.
Activities that can be avoided for The 70K CEO at
Gravity Payments.
Activities that can be determined as your weakness
in the market.
Factors that can reduce the sales.
Competitor’s activities that can be seen as your
weakness.
SWOT
S_Strength W_Weaknesses O_Opportunities T_Threats
OPPORTUNITIES:
Good opportunities that can be spotted.
Interesting trends of industry.
Opportunities for The 70K CEO at Gravity Payments
can be obtained from things such as:
Change in technology and market strategies
Government policy changes that is related to the
company’s field
Changes in social patterns and lifestyles.
Local events.
SWOT
S_Strength W_Weaknesses O_Opportunities T_Threats
THREATS:
Following points can be identified as a threat to
company:
Company’s facing obstacles.
Activities of competitors.
Product and services quality standards
Threat from changing technologies
Financial/cash flow problems.
Weakness that threaten the business.
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