Recently there has been a lot of buzz about a young CEO in Seattle who gave raises to all of his employees. Huge raises. In fact, taking a huge cut against his own nearly million-dollar salary, Dan Price of Gravity Payments announced to his staff in April that he would be raising all of their salaries to at least $70,000. He said he was doing this based on academic research that suggests people might be happier when they are making approximately $75,000.
“Some people thought I was insane when I told them my idea, but I believe this will have a positive impact not only on business, but society,” Price told one of my colleagues in an email. “I’ve always believed we need to do what is right, to put skin in the game, for the benefit of the greater good.”
We are riding a wave of corporate happiness right now, and Gravity Payments is just one of many companies looking to boost their employees’ contentment. Price may be looking to achieve this goal partly with his “magic number of happiness,” but other leaders are seeking office nirvana in other ways. After years of economic downturn, in which most companies were content just to keep their bottom lines from bottoming out, CEOs now have the luxury of attending to the satisfaction levels of their workers.
“This is getting bigger all the time,” says Jenn Lim, chief happiness officer (yes, that’s a real title at many companies now) and co-founder of Delivering Happiness, a consultancy group that works with more than 2,000 companies around the world, including Lowe’s, Morgan Stanley and Aetna. She launched her company with Zappos CEO Tony Hsieh after his 2010 book, Delivering Happiness: A Path to Profits, Passion, and Purpose, sold like gangbusters. “More and more companies are saying, ‘I get it.’ This happiness thing isn’t just a buzzword.”
As Lim and others will attest, however, there’s more to spreading happiness in the workplace than just spreading the wealth. It seems that Price’s attempt to raise the happiness quotient of his workers through salary hikes works only up to a point, after which the old adage “Money can’t buy happiness” kicks in.
Research shows that workers are indeed incentivized up to about $75,000. But after that, there has to be more to maintain happiness. “Once you take care of your basic needs, then you have that delta where you can explore, ‘What’s this all for?’” Lim says. “Happiness [depends at that point on] a higher purpose. What are you doing that’s greater than self? These are questions as an individual everyone has, but [we help] align that higher purpose as an individual with that of a company.”
Price would appear to agree. “In today’s society, we want to be part of something bigger than ourselves,” he wrote. “We want to look out for people we care about. Most importantly, we want to have a purpose and an impact.”
In addition to hiring happiness consultants like Lim, company leaders are now seeking out workshops, attending speaking engagements and providing surveys to measure their employees’ happiness. “The way our company was run as little as 10 years ago was much different than the way it needs to be run now,” says Eddie Gindi, co-owner at Century 21, a 53-year-old, family-run department store in New York. He hired Delivering Happiness to help him create a new culture after discovering in a 2013 survey that many of his employees were not happy. “We saw a lack of communication, a lot of silos where no one was talking to each other.”
In 2014, Century 21 created for the first time a list of core values and a higher purpose. Gindi has set aside hundreds of hours for training and sessions to teach his 4,500 employees how to communicate better and how to be more respectful to each other. He also convinced his employees’ union to approve performance reviews, and he is working on better benefits for his team. “Millennials want different things in a company,” says Gindi, who hopes to see some results from this major culture change show up in a July survey. “They have different views on how business can change the world. I do believe business can change the world by how we treat our employees and how our employees treat our guests.”
Some companies are offering their employees money to leave if they aren’t happy. Others are offering boot camps to make sure they are a happy fit right from the start. Then there are the office perks—Take Your Dog to Work Day, around-the-clock cafes and happy hours—that are legendary in places like Silicon Valley. All of these are designed to make employees happy on the job and more productive. At a time of great employee turnover, employers are smart to find new ways to maintain retention and improve the value of their companies.
All these things seem to be working. In 2014, according to the Society for Human Resource Management, “86% of U.S. employees reported overall satisfaction with their current job, an improvement of five percentage points since 2013; of this group, 39% reported being ‘very satisfied’ and 47% ‘somewhat satisfied.’ This percentage matches the highest level of satisfaction over the last 10 years, which was in 2009. Between 2009 and 2013, levels of job satisfaction had gradually declined.”
I wouldn’t be surprised to discover that Millennials are leading this resurgence in work satisfaction. They have discovered something that savvy employers like Gindi are starting to understand: that workers feel more connected and committed to their jobs when their workplaces resemble communities rather than factories.
In a recent LinkedIn study, people between the ages of 18 and 24 reported that friendships in the workplace were important to their job performance: 57% said that friendships at work made them feel happy; 50% said that friendships were motivating for them; and 39% said that friendships made them more productive. This contrasts with baby boomers. While a majority of Millennials are willing to share personal details with their co-workers, only a third of baby boomers are willing to do the same.
It may seem strange that the generation currently being maligned for extreme self-centeredness is pointing the way forward. But in some roundabout and counterintuitive way, their technologically fragmented existence may be pushing them toward a truth about human nature that Aristotle pointed out long ago: Human beings are social creatures.
Aristotle also described human beings who are used like beasts of burden as “animate tools.” Surely it is wrong to treat people this way, whether people do so by owning them, as in Aristotle’s day, or by using force to oppress them, or by paying them less than subsistence wages.
Employees are more than mere means of production; they are fellow human souls, whose happiness ought to matter to us, their fellow employees. When we see one another in the workplace as fellow members of a community devoted to one another and to a higher common purpose, we are more likely to find congenial and productive ways of working together for the good of one another and the good of our common purpose.
So it is heartening to see new leaders thinking like Price as they plan the future of their companies.
“There were a few critics,” Price wrote in his email, which I will consider at greater length in my next post, “who came out after [my] $70K minimum wage decision [saying that] everyone who works for Gravity is going to be on food stamps, is going to be on welfare, and this will kill their drive and motivation. They said human nature will take over and the company is going to implode and will forever be an example of how to destroy a company and a society.
“Funnily enough, I think those critics are half right,” he continued. “I appreciate that what they say holds a lot of merit. But what those critics are doing is appealing to the part of human nature we’re moving away from. I think this decision is appealing to the part of human nature we’re moving toward. I think we underestimate the quiet strength inside of us that says, ‘Always do the right thing and always live by your values.’”
For centuries, we’ve been trying to squeeze productivity out of workers by minimizing sociability in the workplace. Maybe we should take the opposite tack. Maybe we should start listening to the Millennials, and try to make work a supportive collaboration of caring individuals committed to a common goal with a higher purpose.
I’m not suggesting that every CEO can go as far as Price has. But more motion by corporate leaders in this direction would not only generate greater contentment in the workplace, but also enhance the sense of achievement, satisfaction and happiness in society at large.
 “One Company’s New Minimum Wage” (New York Times)
 Gravity Payments
 “High income improves evaluation of life but not emotional well-being” (Proceedings of the National Academy of Science)