CHANGE INITIATIVE ASSESSMENT

Change Initiative Assessment

Jeff Allen

Liberty University

BMAL 504 – Leading Organizational Change

Part 1

PayPal and the Financial Wellness Initiative

In the year of 2015 Dan Schulman became CEO of PayPal. At that time everyone

thought of the company as just a button to hit when purchasing stuff online. Dan Schulman

wanted to change that and he wanted to start with helping his employees see his vision and to

help them feel more valued. Part of his vision was to provide a universal financial health plan

for his employees (Zeynep & Kalloch, 2022). Dan Schulman wanted to help the world be

financially healthy and, on his mission, to accomplish this he found out that his own employees

were living paycheck to paycheck. To help with this he created a comprehensive program to

reduce healthcare costs and he even granted stock awards to all of his employees. He believed if

he had a strong community around his company, his company would grow faster.

The Digital Payment Industry

Digital payments have been around for a while and the use of mobile apps for digital

payments have become more of a new thing these past 10 years. Apple pay was one of the first

mobile apps to offer this. These mobile payments could be funded by your bank account or

maybe even your credit card. This has made it way more convenient for the consumer to

purchase things online or in person. When we talk of consumer usage of these platforms, in

January 2021, the global digital payment was $6.7 trillion and that is expected to grow 14%

between 2020-2025 (Zeynep & Kalloch, 2022). Part of this accelerated pace is due to the Covid-

19 pandemic. Covid-19 quickly forced companies to adopt a more contactless payment method.

People who were stuck at home just shopped online in the comfort of their own home. Soon we

started to see Apple pay, Google pay and Samsung pay. We even start to see traditional financial

services creating click to pay options on various websites. Banks started to create their own
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version of digital payments like Zelle and Square Cash. PayPal and Venmo have now become

one of the leading users of digital payments (Klingler-Vidra, 2022).

PayPal’s History

Paypal was founded in 1998 by investors Peter Thiel and Max Levchin but PayPal really

took off when it merged with Elon Musk in 2000. PayPal really started to grow once it got hold

of eBay and became a common digital transaction to buy stuff from the website. PayPal would

charge a 3% fee on every transaction. In the early 2000’s people had been sending personal

checks and money orders but with PayPal you could now remove that friction by linking your

checking account or debit card account to your PayPal account. This was a huge deal for PayPal

customers and by 2002, PayPal went public at a valuation of $777 million (Zeynep & Kalloch,

2022). Almost a year later eBay bought the company for $1.5 billion. Soon the company bought

out the platform Braintree and with that Venmo, which would become one of PayPal’s most

popular products. By 2013 PayPal was one of the most used digital payment methods and was

moving $180 billion in 26 currencies all over the world. In 2014 Carl Icahn who was a large

investor in eBay argued that eBay and PayPal should be two separate companies. This led

PayPal in 2015 to become its own independent company led by Dan Schulman.

New Leader Dan Schulman

Dan Schulman was raised in a very social activist home and mom and dad cared greatly

about equality. His family was heavily involved in unions and he would attend several civil right

marches growing up. After Dan graduated from Middlebury College he was hired by AT&T

where he became head of consumer markets (Zeynep & Kalloch, 2022). After years at AT&T

Dan did not like what he was doing and left and was hired at Priceline.com and then went to

Virgin to help launch its mobile service. While Dan was at Virgin Mobile he and CEO Richard
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Branson talked about social responsibility and larger issues other than just making a lot of

money. In 2010 Dan joined American Express for 4 years until he became CEO of PayPal in

2015.

PayPal’s New Mission

When Dan Schulman came to PayPal, the user growth had slowed down and its

technology was not up to date with other companies. PayPal also was having a hard time

attracting new talent and retaining talent was an issue. Dan felt like this was a great opportunity

to redefine the brand and set a new mission statement for the company he just took over. Dan

wanted the new mission statement to include serving the financially underserved consumers and

small business. He really wanted to help those who are financially unprepared become prepared

(Jackson, 2022). In 2021 around two billion adults did not have a bank account but most of them

did have a smartphone (Zeynep & Kalloch, 2022). Dan knew that a lot of those underserved

consumers would use financial services like payday loans to cash a check or send money and

even pay pills. These payday loan companies averaged 391% annually. PayPal’s new mission

statement would be to help everyone have access to affordable and secure products and services

to help everyone take control of their own financial lives. PayPal wanted to give more than just

access but wanted consumers and small businesses to have financial health. Dan knew that

financially healthy individuals will be more likely to spend money on small business or even

start one for themselves. This will create good jobs and help everyone in the community.

PayPal’s Employees and Values

PayPal wanted to become a more integral part of its consumers' day to day business.

PayPal wanted to be a full-service partner in markets that did not traditionally have access to

financial institutions. A big help with this was collaborating with credit card companies and
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banks to allow customers to choose their preferred payment. Paypal also added cryptocurrency

to its list of payments and added direct deposit and bill pay.

Dan was on his way to helping those in underserved areas find some finically freedom

but in 2017 a large wildfire burned down several houses and some of those houses were PayPal

employees. PayPal jumped in to help those individuals and in the process of this found out that

many PayPal employees have gone through life altering events which needed financial support.

This sparked Dan to set up an emergency relief fund for his employees (Zeynep & Kalloch,

2022). A committee was formed to review the request and funds would be given out on a

weekly basis to those who needed it. The company made many grants over the years. The issue

was that the volume of requests became alarming to the committee. It was an eye opener

showing how much the employees have financial issues throughout the years. Hardship at home

is an issue that can affect one’s ability at work (Yabroff et al., 2020). One issue was PayPal

employees could not pay their own medical expenses because they could not afford the

company's own insurance. Health care costs have been a major reason for a lot of financial issues

in families. Employees are now looking at health care benefits more than salary pay when

looking at jobs (Blendor & Altman, 2018). After further investigating, PayPal found out that

many of their employees have around six percent of their paychecks left over after they pay their

bills.

Financial Health of PayPal Employees

Dan Shulmans and other leaders from PayPal got together to address this situation and

came up with a financial wellness plan to help employees and others reach financial health. The

committee came up with a four-point financial plan to help PayPal employees become more

financially stable (Zeynep & Kalloch, 2022). The first part was to just raise wages immediately.
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The second part was to reduce health care premiums by 60% (Jackson, 2022). The third part was

a one-time equity grant that averaged around $3100. The last part was a complementary

financial wellness coaching plan to help educate employees on how to better budget and manage

their money. PayPal’s large investment to this program was tens of millions of dollars in just the

first year alone. With this investment Dan was hoping to see a higher, more engaged workforce

and that his workers would be more focused on the job and he would see more retention, which

would save the company money in the long run. When this took off Covid-19 pandemic broke

out and PayPal decided to weather the storm together as a community and did not lay anybody

off due to the pandemic. PayPal gave its customer service agents all laptops and a stipend for

home office equipment. With everyone buying at home during the pandemic, PayPal products

skyrocketed.

PayPal in 2021

PayPal saw a record growth since they initiated the financial plan and though some of

that could be due to the pandemic there were indications that the financial wellness plan was

working. PayPal sent out a survey to its employees and a good portion of the responses indicated

that they did see improvements in their finances. The turnover rate at PayPal fell from 19.4% in

2019 to 7.3% in 2020 (Zeynep & Kalloch, 2022). This showed that when you take care of your

employees, they will want to stay longer and work harder for the company. Many employees

would tell Mr. Schulman that staying at PayPal would then be able to send their kids to college.

They would be able to pay down their debt and be able to live a more comfortable life. Dan

Schulman did not stop with the financial wellness at PayPal but continued to add support and

services for his employees (Jackson, 2022).

PART 2

Diagnosis of Current Situation

PayPal started in 1998 with investors Peter Thiel and Max Levchin and it really took off

when Elon Musk came aboard in 2000. PayPal really started to find its niche when they aligned

with eBay and by 2002, PayPal went public with a valuation of $777 million. Right after that,

eBay bought the company and continued to see PayPal grow over the years. By 2013 PayPal

was in 193 countries and was generating billions of dollars. By 2015 eBay decided to make

PayPal its own company and Dan Schulman took over PayPal. Dan Schulman wanted to do

more than just make money but really wanted to make a difference at PayPal. Dan Schulman

wanted to rebrand PayPal and he did that by creating a new mission statement. Rebranding can

give a company, even an old company a new chance to start fresh and really grow (Spenkelink

2022). Dan noticed that a lot of people worldwide did not have a bank account and that many

people were relying on payday loans to cash their checks and transfer money with high fees

associated with that. Dan’s new mission for the company was to ““democratize financial

services to ensure that everyone, regardless of background or economic standing, had access to

affordable, convenient, and secure products and services to take control of their financial lives.”

Dan wanted to help consumers and small businesses have financial freedom and health. He

knew if he could help them become financially better it would help the community as a whole.

During this process Dan found out that his own employees have major issues dealing with

financial freedom and that many of them have a hard time paying their bills or having much

money left over after they pay their bills.

Recommendations
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I just love what Dan did with this situation and I feel I would have done the exact same

thing. Dan decided to invest in his employees and he was hoping by investing in his employees

they would in return work harder for him and stay longer in the company. To do this he

implemented a 4 part plan called his the financial wellness plan. The first part of his plan was to

immediately raise the wages of his employees. When you raise wages significantly at work, this

can boost productivity with your workers (Hornbeck 2018). This productivity can really pay off

later with retention and employee satisfaction. When employees are happy, the customers will

see that and the employees will be more willing to go the extra mile to help the customers. This

was a no brainer as this would help his employees pay their bills and feel more valued as a

person. Second, he reduced health care premiums by 60%. Dan knew that his employees were

having to pay a lot for health care and he wanted to help them save some money by reducing

their premiums. Third, PayPal gave a one time equity grant, averaging around $3100 to its

employees and this allowed the employees to invest in PayPal shares and be able to build and

accumulate wealth. Lastly, PayPal gave its employees a complementary financial wellness

coaching program. This program would help educate their employees on how to be financially

stable and healthy. When we read in the bible it teaches us to be fishermen of the lord (English

Standard Version, 2001). The lord has taught us to not only feed his sheep but to teach them

how to fish. I feel Dan was trying to do this here by teaching his employees how to fish instead

of just giving them fish. Because once they learn how to fish they can fish on their own.

Implementation Plan

On October 29, 2019 Dan Schulman held a town hall meeting where he talked about his

new employee financial wellness program to the entire company. The announcement was

followed by cheers and applause. The employees were shocked at the plan and did not believe it
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at first. Dan Schulman wanted to let his employees know how much he truly cared for them.

When you put in the extra effort of caring for someone, you can receive ten fold back from that

person (Fix et al., 2018). I know when I have felt supported by my boss, I do feel more inclined

to work harder for that person or even go the extra mile when needed. Dan knew this and it did

work as PayPal products skyrocketed the following years.

Summary

PayPal's big investment in their employees was a huge success and the financial health

program really showed the employees of PayPal that the company really does care about them

and does appreciate their hard work. When employees feel appreciated at work they are more

motivated to work harder. Dan saw a huge change in retention after implementing this plan and

more of his employees wanted to work longer for him. Dan talked about how the longer an

employee works for the company the better they will understand the products they offer and the

better the support they can give the customers.

References:

English Standard Version Bible. (2001). Crossway Bibles. https://www.esv.org/

Fix, G. M., VanDeusen Lukas, C., Bolton, R. E., Hill, J. N., Mueller, N., LaVela, S. L., &

Bokhour, B. G. (2018). Patient‐centred care is a way of doing things: How healthcare employees

conceptualize patient‐centred care. Health Expectations, 21(1), 300-307.

Hornbeck, R., & Moretti, E. (2018). Who benefits from productivity growth? Direct and indirect

effects of local TFP growth on wages, rents, and inequality (No. w24661). National Bureau of

Economic Research.

Kottwitz, M. U., Pfister, I. B., Elfering, A., Schummer, S. E., Igic, I., & Otto, K. (2019). SOS—

Appreciation overboard! Illegitimacy and psychologists’ job satisfaction. Industrial health,

57(5), 637-652.

Zeynep , T., & Kalloch, S. (2022, August 1). PayPal and the Financial Wellness Initiative.

Retrieved December 16, 2022, from https://mitsloan.mit.edu/sites/default/files/2022-03/MFin

%20Employment%20Report_2021FT_2022INT_1.pdf

Jackson, P. (2022). Employee financial health comes to the fore after COVID. Strategic HR

Review.
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Spenkelink, A., Westerlaken, R., & Suleri, J. (2022). Exploring the impact of rebranding on

stakeholders: a case study of Hotel Management School NHL Stenden. Research in Hospitality

Management, 12(1), 71-79.

Blendon, R. J., & Altman, D. E. (2018). Public attitudes about health-care costs. A lesson in

national schizophrenia. New En gland Journal of Medicine â, 311.

Yabroff, K. R., Bradley, C., & Shih, Y. C. T. (2020). Understanding financial hardship among

cancer survivors in the United States: strategies for prevention and mitigation. Journal of

Clinical Oncology, 38(4), 292.

Klingler-Vidra, R. (2022). Book review: The founders: the story of PayPal and the entrepreneurs

who shaped Silicon Valley by Jimmy Soni. USApp–American Politics and Policy Blog.
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