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Experiential Exercise
La Mexican Kitchen CHAPTER 11 • Motivating and Rewarding Employees 375
To: Linda Bustamante, Operations Manager
From: Matt Perkins, Shift Supervisor

Linda, HELP! We’re having a difficult time keeping our food from tips. But it seems that this isn’t enough to motivate them
servers with us. It seems like I just get them trained and they to stay. So what would you recommend? Could you jot down
leave. And we both know that our servers are key to our com- some ideas about how to better motivate our food servers
pany’s commitment to excellent customer service. We can have and send those to me? Thanks!
the best food in town (and do!), but if our servers aren’t motivat- This fictionalized company and message were created for educational
ed to provide excellent service, we won’t have any customers. purposes only, and not meant to reflect positively or negatively on manage-
Although these positions pay minimum wage, you and ment practices by any company that may share this name.
I both know a motivated server can make additional money

cASe APPlIcATIoN 1
#

One for the Money…

oes money buy happiness? Several of the 120 even more interesting was the dollar amount that respondents
employees at Gravity Payments, a credit card process- said would make their daily life more pleasant: about $75,000 a
Ding company based in Seattle, are about to find out. 75 year. Price decided to offer his employees a minimum salary of
The company’s founder, 29-year-old Dan Price, made $70,000. He felt that giving his employees this amount could
the news in the spring of 2015 when he decided to bump up enable many of them to buy homes and pay for their kids’
the salary of 70 employees to a new “minimum wage” of educations.
$70,000. Now, everyone in the company will be making at To pay for the salary increase, Price is taking a pay cut
least $70,000. Some employees at the company, where the av- from his annual $1 million salary down to $70,000. Also, the
erage salary was $48,000, doubled their pay, and others got a company will have to use 75 to 80 percent of its profits to help
nice salary increase—prob- cover the cost. Some manage-
ably enough, you’d think, ment consultants are questioning
for employees to be pretty Money = Happiness, or the move, wondering if it will
happy about! Does It? affect employee productivity and
Why did Price do it? pay off in the long run. Concerns
He said that he had been about what happens to employee
thinking about employee pay for a while, especially after motivation include: Will employees be less motivated to work
reading several news reports about the glaring pay dispari- to be promoted to higher levels of responsibility, and would
ties between corporate CEOs and employees, which he says those employees who put in additional effort above and be-
struck him as “ridiculous” and “absurd.” Also, Price had read yond their current tasks lose the incentive to do so (“why
an article on happiness by two Princeton researchers (one a should I work harder if we all get the same pay”). And what
Nobel Prize-winning psychologist) who had surveyed 450,000 happens to the CEO’s motivation—would Price himself lose
U.S. residents on whether money could buy happiness—both the incentive to want to grow the company? Then, there’s
as it affected overall happiness but also how it affected day-to- also the question of what happens if the company’s profit-
day life. The researchers concluded that people claimed to be ability starts to fall. Only time will tell if such issues are even
happier with each doubling of income but only to a point. But relevant.