A CEO decided to try a unique experiment in 2020.
Calvin Benton, founder and CEO of mental therapy company Spill, decided to pay all employees the same amount of money. This included himself.
In the end, the attempt had to be abandoned because of “market forces”. Here’s what happened.
A bit about the company
Spill is an online mental therapy and counseling service. It’s aimed at working with companies to help employees with everything from work-related stress to depression.
The company was founded two years ago in London. Since then, they’ve taken on over 100 UK-based companies and hired over 10 full-time employees.
In 2020, Benton reported that Spill’s sales grew exponentially due to an increase in stress, pressure, lack of motivation, and more related to working from home during the pandemic.
To get assistance with such issues, clients of the company are matched with qualified therapists over apps such as Zoom.
The equal pay experiment
When he started Spill, Benton decided to try paying everyone, including himself, the same salary. He told BBC:
“There were five people, and everyone was pretty much contributing the same. So we tried this experiment where we paid each of us an equal amount of money – regardless of experience, regardless of role. We wanted to challenge the traditional model of pay. We decided on GBP 36,000 a year for everyone. We calculated that was a decent living wage for London.”
The measure seemed to work well at first – there was no awkwardness when the team would go out for drinks, for example, and decide who was paying.
Then the problems began
The company started to grow and it became necessary to take on more employees across departments. Everyone from salespeople to software engineers was offered the same salary; GBP 36,000 per year.
And then things started going downhill.
Benton explained to BBC: “Software developers are typically very in demand, and they usually take a higher salary than GBP 36,000. Salespeople are typically paid on commission. So it was not a model which particularly suited either of those two industries.
We really struggled to attract senior talent for the software role. And it got to about three months in when the salesperson started asking to be paid according to sales targets they’d achieved, saying the fixed salary wasn’t working for them.”
On the other hand, applications for administrative job openings were flooding in. GBP 36,000 was a higher salary than other clerical jobs, which was attracting people who were looking for money – as opposed to those who genuinely believed in Spill and its mission.
The issues didn’t stop at potential employees. Already-hired staff was beginning to point out discrepancies between employees and their pay. Benton explained to BBC:
“When we grew the team, we started to have some people who contributed more than others. You had some people who worked longer hours than others. The question started to arise: should this person be paid the same amount as me?
That caused a conflict in the team and a conversation in the team about whether this experiment was right to continue.”
Ultimately a failed experiment
A year later, Benton realized the pressure of the equal pay system was too much. So, the company instituted a traditional salary structure with pay grades based on experience and expertise.
“I think it was a disappointment when the experiment failed. We wanted to do something which was democratic and egalitarian. But sometimes traditional practices are there for a reason. Sometimes you don’t have to reinvent the mold on everything,” Benton explained to BBC of the decision.
Spill decided to keep one aspect of employee salaries non-traditional, however. Benton enacted full transparency with pay levels, letting all staff know what each employee is paid.
What do you think about this equal pay experiment? Do you think it’s a good idea? We love to hear your thoughts – let us know!
Source: #Norway Today / BBC interview / #NorwayTodayTravel
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This is exactly the same idea that moved the USSR at the beginning. Soon they met the same troble and had to introduce more traditional model, combining fixed wage with extra payment for “labour achievments”. In the end of it all soviet people lost any motivation and work efficiency dropped down nationwide what led to a final system collapse.
This kind of experiment was conducted in USSR, but it was not experimental, more policy. It was called “Uravnjilovka” freely translated “same level”. It failed, and failed in system where all other companies are doing the same, so there is no competition for workforce. One of the reason for failure was there was no incentives to do better than your peers, so then everybody starts working at minimum capacity to fulfill form and inevitably the whole company collapses.
The results were predictable. I’m interested to know why Spill decided to be “transparent” by making everyone’s earnings public knowledge within the company. What was that intended to accomplish specifically?