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The Importance of Paying Earnest

One of the most irritating (nay, disrespectful) things a manager or organisation can do to a worker is send them home on Friday afternoon without money in their pockets. From experience, the larger the organisation the less the managers give a toss whether casual / part-time workers receive their wages. Obligations seem to stop at collection of the time sheets.

There are few things as demeaning as putting in daily effort in a workplace where everybody else can afford a cup of coffee, while you can’t get enough food onto your family dinner table. Even as a contractor, where you can invoice a period for payment limit like 30 days, the larger organisations will come back with their own payment policy of at least 40 days or higher. So you either take the work, or you let your competitor take it.

Not being paid for a few months happens. And from experience it happens to in-house part-time and casual workers with an even greater hit to morale and social well-being (because at least the contractor knows he’s on the outside). That’s the part that really boggles me; not paying someone is easy to fix by actually paying them. Cross their palms with silver.

There are a couple of relevant factors worth noting in my little gripe about OPDD (Organisational Payment Deficit Disorder).

The first is that a full-time employee has traditionally had a one-time blow at the pay office until things were sorted. However, organisations now employ as many part-time / casual workers as possible to maintain flexibility, save on the wages bill and to avoid being bound to any legal obligation to provide extraneous benefits afforded the real employees. Many of these non-permanent employees drop in-and-out of the organisation’s wages regime. Every time they drop back in, the non-payment issue returns as a systemic wound.

Yet, with all that saving being achieved there seems to be no determination (or skill) at either Human Resources or the pay office to get people payed promptly and without error. Absolutely every time I’ve worked for large organisations this has been a tiny little nightmare. There’s nothing like constantly being told you’ll get your pay this fortnight and not seeing it in your account on the day.

The second point is a little less flattering for those organisations. It has everything to do with the time value of money.

The longer funds stay in the organisation’s account (and this adds up to quite a lot of funds across the employment register), the richer the organisation’s account is for gaining interest and securing short-and-long-term finance.

Time value of money says to pay your debts later and receive incoming funds sooner. In this paradigm, part-time and casual employees are seen as debts to pay later.

So every time I, or someone close to me, gets messed over on payment from these companies I become just that little more cynical. Yes, it’s a cash benefit to withhold funds for an extra month or two. But at what cost?

Workers who aren’t valued are expensive to replace. Workers who aren’t paid on time become less productive and stop buying into your organisational goals and culture. In the longer term, I’m not convinced that a short term exploitation really benefits the organisation beyond that one-time financial hit.

And managers who don’t give a toss whether their workers have food on the table at the end of every week? Fire them. Hire somebody better. The first thing you are obligated to provide any workforce is the security that comes with payment. [rant ended]

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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