Equity

March 1, 2023

​​What would you prefer?

(A) $1000 bonus, but it is the

largest in your team

(OR)

B) $2000 bonus, but it is the

smallest in your team

There was a classic case study of a company Gravity paymentswhere the company in the year 2015 had to cope with backlash against the raise that Roared!!

Interesting isn’t it? There were 2 important changes that were brought inside the company as below:

Gravity Payments CEO

a first raise in 2015)

Even though this looks good at the first instance there was a major backlash since employees who performed exceptionally well left the company immediately even if the intention was to bring parity in the pay scales. Look at some of the feedback given by the employees who left the company.

“He gave raises to people who have the least skills

and are the least equipped to do the job, and the

ones who were taking on the most didn’t get much of

a bump”

Financial Planner who left the company

“Now the people who were just clocking in and out

were making the same as me… It shackles high

performers to less motivated team members.”

Developer who left the company after having his

salary raised from $41,000 to $50,000

The consequences of Inequity was too much to handle for the company. It is always better to strive for the equity in the long term rather than looking at small wins.

Some of the best practices as below when rewarding a team member or an employee as below: