Companies often try to save money by paying their employees as little as possible and avoiding giving out raises at all costs.

What would you do if your department was bringing in 1/3 of the company profit, but they refused to give you even modest raises?

That is what happened to the team in this story, so they either quit or transferred teams, causing the company to lose so much money they had to sell the department.

Let’s check it out.

Malicious Compliance Costs Company Hundreds of Millions and Their Most Profitable Product.

So many years ago this person, lets just refer to them as Person.

Person got a really great job working for a fortune 500 company.

Not going to give any more specifics.

But the company offered many benefits for their employees.

They treated their employees like people and not like numbers.

They offered a yearly raise to anyone who worked there.

This sounds like a great company.

This was meant to do several things, first of all it was meant to keep up with inflation so that employees wouldn’t have to stress about money.

I’m sure a lot of you know the struggle, waiting for min wage to be updated so you can start saving money to hold over till the next wage increase.

No the company was ahead of the curve.

On top of that when they did start hiring new employees for more they increased the wage of anyone with that specific position by the same amount to keep older employees from earning less than newer employees.

They offered many many other benefits as well. Basically an awesome place to work.

Unfortunately it’s a small town and the company wanted to expand that specific branch of operations.

They couldn’t do it here so they chose to move out.

They sold the branch office building along with the product that Person worked to another smaller company.

That is really nice of them.

When it was sold, person went with it, the old company made the new company sign a contract which guaranteed that the yearly bonus would stay around along with several other similar benefits.

New company wasn’t around very long and ended up expanding as well, they did the same thing, sold the location and product to another company.

Unfortunately they didn’t care as much about their employees and only treated them well because of contractual obligations.

So, when they sold the location and product it did not come with a contract.

New new company did care a little bit about employees, but ended raises and all of that.

They would listen to employee complaints but that was about it. They weren’t around long either before the scummiest company came in and bought them out.

So, new company comes in and buys them out and immediately starts changing policies and shifting everything up to make everyone jobs harder.

Person and their team members got use to it and kept going.

Now here’s the thing about Person.

Person works on a team of specialists, there are only about 12 people on the team and a manager that’s over them.

Well there was, I’ll get to that.

This team doesn’t require any special education or anything but it does require a several week training course and several months of acclimation.

The product is extremely delicate, and the customers for this product are extremely demanding.

They more or less require perfection, anything short and no money.

You must watch every single word that you say to these customers or they might write you off permanently.

However, this is an extremely valuable product and the company makes a lot of money from it.

Or they did at least.

Lets speed forward about 10-15 years.

They are doubling down on the bad treatment.

The company has only found new ways to treat their employees less like humans since they took over and are somehow getting away with it.

Turnover is high, but as long as they have high-school grads looking for a job then they can keep their building full.

Unfortunately Person and their team have asked for a raise several times at this point, they were always being turned down because they are earning “at market value” for their position.

Looked it up and market value is determined by a simple equation that takes into account other people in your profession at your experience level and with your job title within about 100 miles and calculates average wage for them.

Considering the extreme specialty of this position and being located in a remote region “market value” is determined by calculating the average wage of everyone on Persons team.

Basically the company was saying “shut up we aren’t giving you a raise.”

Now, something to understand Person and their team members weren’t that disappointed not to get a raise every year.

However, they were now making only a little more than a new-higher with the company, and there are other companies that do similar but less specialized work in the area but start people out at with a higher wage then person is making at this point.

I literally knew high-school grads with 0 work experience that made more than person did.

Now at this point Person has about 20+ years of experience working this specific product.

And the least experienced person on their team had been working it for 12+ years.

The straw that broke the camels back was an annual investors meeting that was streamed live to the entire company.

Person, working on a small team was invited to take a few hours off to watch the meeting.

It was kind-of a reward for them for preforming so well.

The company shot themselves in the foot with this one, though it was already starting to go south anyways, they just sped it up a little.

So, to put this into perspective for you guys the company total profit for that year (profit not earnings) was a little over 1.2 billion.

This small team is a gold mine.

Out of that 1.2 billion Persons team of 12 people (in a company employing tens of thousands mind you) these twelve people (and a manager) brought in about 480 million.

That’s a little over a third of the companies total profits for the entire year.

For those that don’t like math, that’s about 40 million per person of pure profit.

Person specifically earned a little over 60 million alone.

The lowest earner on the team was over 20 million.

Seeing that they were single handedly responsible for over a third of the companies total profit for the year the entire team got together and demanded a raise.

The manager actually put that in before they even said anything, even their manager thought it was wrong.

They demanded $20 an hour.

They actually only wanted half of that, but since they were being low-balled and completely unappreciated by the company for the work that they did, the put in a higher number.

BTW $10 is about the amount they would have been making with their yearly bonus had it never been discontinued.

As you might expect the company being money hungry came back with the same response as usual, didn’t even try to negotiate.

They asked several more times over the course of a few weeks threatening to quit if they didn’t get a raise and the company basically just said “Go on, anyone can do your job.”

Cue malicious compliance.

I can’t believe they let these people leave without offering them a raise.

They didn’t all quit only 3 of the 12, which if you’ve been keeping up would add up to on average 120 million dollars over one year.

But that’s not all actually what they did ended up turning out even worst for the company.

The rest of the team all agreed to only work their minimum requirements.

The company had minimum requirements that everyone had to meet, this team up to this point being proud of the work they put in consistently exceeded the requirements many times over.

They would compete to see who could preform the best, the lowest earner on this team often exceeded minimum requirements by three times over.

At the end of the year the company had to painfully explain to investors why their highest earning department was now preforming at less than half what it did the previous year, they came up with some stupid explanations.

They still refused to give a raise though, instead what they decided to do was raise their minimum requirements.

At first the team kept up, but eventually out of aggravation when their constant requests for a raise were denied about half of the team requested transfer off.

They were transferred to other depts and replaced with brand new employees the most experienced of which had been with this company for about a year.

These new employees struggled to keep up with the minimum requirements, which kept getting raised to meet stock holder expectations.

Eventually every original member on the team had either quit or transferred to another dept even the manager.

This left the team with only new employees who had absolutely no idea what they were doing, they completely alienated the vast majority of their former customers almost over night.

If that wasn’t’ enough, because they could not meet the extremely high demands of the company (still only a fraction of what the original team was preforming) they were either let go or transferred to another dept and replaced after only a few months on the team).

Even hiring several times the number of employees on that team did nothing.

This should have been such a simple fix.

When they reported an earnings of 80 million from that team the company got so fed up with it that they just sold the product to another company for an enormous loss.

Unfortunately this isn’t one of those “The company drove themselves out of business” stories but I still think it’s pretty funny and I like to tell it to all of my new friends.

I also use it to warn anyone who might be considering going to this company to work.

Honestly, you’d think that if someone earns that much profit for your company you’d at least try to keep them around.

This company lost millions in order to save thousands.

Read on to see what the people in the comments say about this situation.

This would have been the smart move.

This seems like a great law.

Exactly.

Absolutely, keep them happy!

Yes, they should be given anything they want.

This is almost criminally bad management.

Who is hiring these managers?!

If you liked that story, check out this post about an oblivious CEO who tells a web developer to “act his wage”… and it results in 30% of the workforce being laid off.