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Discussion Topics for Today's Classroom

A Good Thing or A Bad Thing? WOW!

Posted August 3rd, 2015 by LuAnn Bean & filed under Accounting Information Systems, Accounting Principles, All Articles, Auditing, Cost Accounting, Financial Accounting, Intermediate Accounting, Managerial Accounting, Video Updates.

Three months ago, Dan Price announced he was setting a new minimum salary of $70,000 at his Seattle credit card processing firm, Gravity Payments, and slashing his own million-dollar pay package to do it. The result has been turmoil, both internally and externally.

Questions:
1. What new costs has Mr. Price faced since his announcement and why?
2. Explain what Mr. Price means about the stakes of income equality expanding since his decision.
3. Discuss the costs and benefits of this new policy. Include both internal and external factors as covered in the article.
4. What qualitative performance factors do you anticipate?

Source:
Cohen, P. (2015). A Company Copes With Backlash Against the Raise That Roared. The New York Times, July 31
(Retrievable online at http://www.nytimes.com/2015/08/02/business/a-company-copes-with-backlash-against-the-raise-that-roared.html?mabReward=A5&moduleDetail=recommendations-0&action=click&contentCollection=Business%20Day&region=Footer&module=WhatsNext&version=WhatsNext&contentID=WhatsNext&src=recg&pgtype=article)

Tags: business strategies contemporary business issues cost and benefits cost shifting by employers Costs Disclosure Issues in Financial Reporting ethics external feedback human resources income equality Internal Controls internal feedback litigation living wage qualitative issues in cost decision making Revenue Recognition risk Wage and Payroll Expenses

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