25 February 2017
Same wage for everyone – Pardon?
The same wage for everyone is the topic our blog article deals with today. What for most of us sound like a total mind-boggling idea is already implemented in other areas of the world, e.g. in the country most of us won’t think about, in the USA. We wanted to write about this topic some time ago, because it fascinated us so much and we had the chance to participate in last year’s “Zukunft Personal” and listen to a presentation about it.
How does it come that certain companies decide to pay the same wage for all employees? Well, lets take for instance the company from the US. Here the CEO personally decided to take this step. This with regard of increasing rents in the cities and the high costs for living and with regard of the very low salaries for certain occupation groups in the US. This all happened in the company Gravity Payments. The CEO Dan Price therefore decreased his own millions in salary down to 70.000.- US Dollar. Today every employee earns the same amount yearly. This is a very noble step of him and it also caused a lot of medial attention, e.g. in this article of the New York Times. You can read more about how it all works and what had to be done to make it work. Of course this whole process doesn’t work from one day to the next day and the way it is implemented at Gravity Payments is very extraordinary. That’s why it caused a big medial effect that reached also other parts of the world.
Are there similar approaches in Europe?
Unfortunately we don’t know European companies that did dare this step. In the German-speaking area there is more discussion about the topic of the equal salary for women and men. This is still a big topic, because in some fields there are vast differences. We also wrote about this in our blog article about pay transparency. Besides that there are big differences between certain occupation groups, where until today you won’t find comparable salaries.
Should salaries at all be the same?
Is it useful that salaries are the same or comparable? Where is the incentive to earn more? Of course it should be worth it that people who show great performance and show substantial added value to the organisation earn more. In most cases this is regulated in the bonus or compensations systems. With regard of the same pay it is rather meant, that the basic salary doesn’t have major differences, as this wouldn’t be a fair approach. Basically the so-called performance-related pays should be considered, as long as they are regulated fairly, i.e. they are reasonable and don’t degenerate.
Conclusion – Is equal pay at all possible?
This is a good question and in most companies and organisations it still won’t be possible. But maybe there will be a bigger awareness created for this topic within the next years. Although it is still a long way, but perhaps someday it is possible that this topic is more openly and publicly discussed. As soon as this will happen, we from HR Software Consulting will keep you updated here on our blog.