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06/11/2015

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First movers that have the leadership and philosophical conviction will have the best chance for success. It is the companies that blindly follow without the same leadership or conviction that will fail.

We have heard a lot about the base pay change in this company but we have not heard about other incentives and equity or performance management. The CEO may have an equity play that makes his salary a moot point. With the flood of applicants may also be putting a lot of pressure on existing employees to step up their performance.

It is all the surrounding programs that will make or break the success of this approach and not the base pay change alone.

Nice that someone has done something in the public eye with that old NAS study. Reality is the final laboratory for experimentation. As others have noted, what they do next with all the myriad reward tools at their disposal will determine whether their handsome minimum wage helps or hurts. Without details about the status quo spend per employee before the base boosts, it is difficult to judge the financial implications for either employees or employer.

My guess is that it will simplify their ability to track the relative contributions of all the other consequences of behavior that they apply for performance management. At this stage of growth, the high base threshold should help them refine their total reward program. In another five years, maybe not. Wait for results.

So true Trevor. There is a lot we don't know about the details. I'm curious to know more about Figure53 mentioned above. They had their program for 2 years. I'd love to know how it's going,

Jim ---Wish we could leap forward 5 years and take a look at results of this program. I think a lot of it will depend on the culture of the company and the leadership. I agree with Trevor that the danger is for other companies to follow this practice lemming-like without understanding all the pros and cons and having a top management that basically is not passionate about it.

Since the original study is now five years old, maybe we should ask around to discover who else might have quietly taken those lessons to heart and done something along those lines? Now, five years later, what changes might be traced to different compensation practices initiated in response to the study? I recognize that most employers are highly reluctant to admit such experiments. Anyone who altered their total reward programs to reflect this research probably made no public announcement about it back in 2010-2011, but it should be safe to speak up today.

Only ones that might be willing to share would be the success stories. No one likes to admit a mistake.

Jim --- sounds like a great idea for a post. Why don't you take it? :-)

Maybe, if others will share some "secret success" stories. I know quite a few, where the innovators kept their mouths shut during potentially volatile initial tentative rollout periods and even sat on their "victory" long afterwards. More would help, for additional confirmation and broader perspective. Feel free to send me private messages that I can redact to keep confidential, if wanted.

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