Have you ever experienced receiving the same amount of salary as the CEO? At first, this setup sounds excellent, especially for the employees. However, in the long run, it brings inevitable setbacks to the company. Calvin Benton, CEO of a British company called Spill, thought that the same pay equals a happy environment. Let’s see if the idea turned out fine for him and his team.
Where it All Started
Calvin Benton is the CEO of Spill, a psychotherapy company that offers an all-in-one solution for employee’s mental health. It provides counseling and therapy to employees over any platform like Zoom, Slack, etc.
When Calvin first founded the company, he decided to pay himself and his team an equal salary. At that time, there were only five people in the company, and everyone contributed the same amount of work. Hence, everyone in the team was paid the same amount regardless of the role and experience.
In the end, after calculating a decent wage enough to live in London, they decided on £36,000 a year. The agreement initially worked well and received positive feedback from the team. Furthermore, it doesn’t matter who pays as everyone has the same salary rate during team outings. The overall team dynamics were more comfortable during those social situations.
However, the team harmony didn’t last that long. The problems started as Spill’s success took off. A growing company needs more staff. That’s the first bump on the road for Calvin’s equal-salary scheme.
A Bump Following Company’s Expansion
As Spill expanded, the team needed to hire salespersons, clerical workers, and software developers. Calvin told BBC that usually, software developers are in-demand. It means that they have higher salaries than their company’s salary model. As for salespeople, they’re usually paid on commission.
Their initial salary model didn’t suit the regular pay grade for the two industries. Calvin admitted that they struggled to attract a senior talent for the company’s senior role. After three months in, the salesperson started asking to be paid according to their achieved commission. The salesperson further added that the fixed salary was not working out for them.
Furthermore, as their team grew, Calvin noted that the equal-pay system began causing inner conflict within members. Some members argued that they worked longer hours and felt they were contributing more than others. Simultaneously, Calvin and his team were overwhelmed with the number of applications they received for clerical jobs.
Unlike sales and software developers, the offer of £36,000-a-year for a clerical job was higher compared to the usual. Also, people wanted to apply for the role because of the high salary. Sadly, they did not apply for the position because they believed in Spill’s mission and vision.
Equal Pay System Experiment: Failed
After a year of using the equal-pay experiment, Calvin decided to pull the plug following staff pressure. In the end, he decided to replace the system with the traditional pay grade structure. Like any other company, Spill followed a format based on company seniority and technical expertise. “Sometimes, traditional practices are there for a reason,” Calvin Benton admitted.
One thing came out good after Spill’s equal pay experiment— open salary policy. Calvin decided to make everyone’s salary common knowledge for the whole staff. He commented that since they adopted an open approach, there were no rumors over who is being paid higher. It helped improve the harmony in the office. Besides, if you’re working for a therapy business, then happy employees and harmony are essential in the workplace.
In Conclusion
After two and a half years in the business, Spill surged to success. Now, it has more than 100 UK companies in their books. Also, their team grew into 13 full-time employees and a number of part-time psychotherapists.
In the end, Spill eventually scrapped their equal-pay system and turned to traditional roots. Indeed, a conventional salary setting is there for a reason. This situation only explains why bonuses and commission pays are essential when running a company. It motivates the team’s drive to deliver excellent results.
At first, equal salary might sound a bit tempting to the ears. However, in the long run, it’s a recipe for disaster. Good thing the equal-salary experiment only lasted for a year.
