Is it a crazy, one-time thing from a whacky business owner, or a possible sign of things to come?

A lot will depend on how things go for CEO Dan Price and his Seattle company Gravity Payments.

As many of you know by now, Dan, as CEO of his company, took a 90 percent cut in his $1 million salary and slashed his company’s profits by another $1 million so he could pay all of his employees at least $70,000 a year in the next three years.

According to an article on the CNN Money website, that will double the pay of about 30 of his workers and give significant raises for another 40.

This definitely reverses a decades-old trend—reward CEOs with millions of dollars, regardless of a company’s performance, while cutting staff and keeping wages stagnant to increase profit margins.

As much as a morale booster as that trend is, Mr. Price may have hit on another approach.

When Price told employees of the new pay policy, people broke into applause and high fives, according to the on line article.

Price stumbled on the idea after reading about happiness and how additional income can make a significant difference in a person’s emotional well being.

Who’d have thought?

He had been hearing his employees talk about the hardship of finding housing and paying expenses and described his action as a “moral imperative,” the article states.

Gravity employee Jason Byrd summed it up. “This gives us so much freedom to just do our jobs and not have to worry about money,” he said.

Price hopes he can get the company back to previous profit levels within two to three years.

We think he will, and then some.

Because a financially secure worker is less distracted, has less stress, is more motivated to work as a team for a company that cares and is ultimately happier and more productive.

Who’d have thought?

And customers like a company that treats its workers well and is productive.

A little profit loss now for a long-term gain in output and profits seems like a no-brainer.

So how come more companies don’t follow that business model?

That’s not the way it’s been done, for one thing.

We don’t know if it’s sustainable, for another. There’s no guarantee that cutting profits to pay your employees well will always lead to company growth and profits.

But being in business is always a risk. Better that businesses who can afford it gamble on their employees and what they can bring to the company’s success, over the cost-cutting status quo with its diminishing returns.

According to Price, other CEOs may be thinking his way, too. The article reported that Price heard from almost 100 CEOs supporting his move.

So maybe this is a sign of things to come.

Who’d have thought?

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