On Prompt Salary Payment

by | Feb 8, 2022 | General | 0 comments

Last week, I ran a survey of over 1000* employees, 21% responded that they had not yet received their January salary by the first week of February.  Some of the respondents gave more detail that this was a recurring experience. 3 responded that they had not received December salaries, while a few others commended their employers on prompt payment of salaries.

While, the results of the survey didn’t surprise me, as this is common practice in Nigeria, it’s important that its implications are understood.

As an employer, prompt salary payment is a responsibility.  It is a contractual obligation that promotes brand credibility.

Persistent non payment of salaries leads to loss of brand equity as current and past employees may speak negatively about the organisation. This in turn, affects the firms ability to attract talented employees.

However, organisations face difficult financial times. Sometimes despite best intentions there are cash flow issues or low periods for businesses.

My advise to such firms is to always communicate these issues to employees before pay day. Be transparent and explain what is happening. Engage employees about the situation and why it is happening. Communicate what is being done about it and seek solutions from staff. It’s also important to set a time line for when payment will be made or when things are expected to improve.

If things don’t improve for the business after the timeline has elapsed, then it’s time to restructure the business which will most likely mean laying off staff.

Non or late payment is a breach of contract and if not well managed, a breach of trust. As difficult as it may be, unless consent has been given, it is not advisable to keep staff employed without payment. Even when employers think they are acting in good faith, it is important to establish that there is consent of employees and that sometimes, the best option is the difficult decision of laying off. If ever faced with this challenge, be sure to lay off in a dignified manner to maintain brand integrity.

Do share your thoughts?

*Data was on Nigerian workers.

©Adora Ikwuemesi

#payroll #business #employeebranding

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