When You Underpay...

kaylarStarred Page By kaylar, 3rd Nov 2011 | Follow this author | RSS Feed
Posted in Wikinut>Business>Employment

Why it costs more to underpay employees than to overpay them.

Typical Example

Ms. Take was offered a job which paid about 50% less than she expected. She accepted the job and the pay without the slightest qualm.

She arrived on time and left on time but during the eight hours did enough work to fit comfortably in two. The remaining six hours were utilized to make private phone calls, enjoy the benefits of free Internet connection, engage in social intercourse with other employees.

During her morning 'break' she would leave the building buy items to prepare for her lunch, having carried a large container from home. She would use the office microwave and carry home the 'leftovers' for dinner.

She got a 'free' flash drive from supplies as well as a printer cartridges, and other odds and ends she took home.

Where she could easily complete five jobs in a day she dropped her quota to one or two.

In short, she made up for the shortfall in her salary but 'topping' up by stealing and gave the boss less than what he paid for.

Who loses?

Scrooge Ltd. is paying Miss Take for 40 hours a week. Deducting her lunch hour and her breaks, (which stretch to 45 minutes when they ought be 30 but there isn't reaction) she is to be working for 30 hours and forty five minutes.

In reality, she is actually producing her employers work for ten hours a week. During the other twenty hours and forty five minutes she is on Facebook, she is playing various games, she is writing articles for online publications, talking on the phone and socialising.

Hence the pay packet she is receiving for her ten hours a week is quite generous, and considering the prices of the items she pilfers, wastes and otherwise takes, add another 20% to that package; plus the fact that she is making a net savings on her electricity bill, telephone and Internet charges, she is doing quite well.

Scrooge, Litd. is not doing very well in this deal. It expects at least 30 hours of work and is getting 1/3rd. Further, the phone bill is rising, the electricity bill is rising, the Internet access is being abused, and very often people like Miss Take wind up downloading malware which will lead to further expense in techie time, repairs, replacements, etc.

Fair Pay

Scrooge Ltd. did not arrive at the pay package accidentally. It has a policy to pay its workers as little as is legally possible. That it pays so little means that they can not expect top level workers. Hence, they do not expect much more from Miss Take than they get.

However, they did not predict how very little they would get and the methods she would use to 'top up' her pay packet. Paying Miss Take twice what she is getting would have gained them not twice the work, (four hours a day) but four times the work. For Miss Take would give them what they paid for.

Hence, by underpaying workers a company doesn't get half the work, it gets 1/4th, plus losses in other areas.

Getting Obligation and Loyalty

Many companies make up for the smaller pay package by 'perqs'. These are often longer paid vacations, shorter work days, or even a four day week. The employee may not be taking home what he or she is worth but is also not working the hours s/he ought.

The 35 hour week often produces as much if not more than the 40.

Often, a four day week, deducting less taxes, transportation costs, lunch and wear and tear is only a very slight alteration in take home. Where there are a number of employees the absence of one has little effect. Where s/he is the only employee or the only one in that section, then one simply makes the arrangments which lessen the impact.

Always make an employee feel s/he is getting a bit more than they deserve. Always give raises based on performance, often going outside of the legal demands.

The employee who feels cherished will work better, longer, and wish to keep the job.

The employee who feels cheated will unwork, leave as soon as able, and will often be looking to leave the position, unless, like Miss Take, they make sure that they take more than they get.


Employee, Employment Issues, Employment Tips, Salary, Underpay

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author avatar kaylar
I am passionate about history, culture, current events, science and law

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author avatar Buzz
5th Nov 2011 (#)

Another of your great writes, kaylar. The facts of life would speak for themselves in this article. Thank you for sharing.

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author avatar kaylar
5th Nov 2011 (#)

The events in this article just happened, again. I had to write about it.

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author avatar Mark Gordon Brown
5th Nov 2011 (#)

Paying fair is important, but treated people well is equally important. I do not know if paying somebody more will make them a better worker but paying somebody less will definitely make them slack off. Treating people bad wont get you far either.

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author avatar kaylar
5th Nov 2011 (#)

When a person thinking they are going to get $XX and you pay them X, if they are really worth XX they'll unwork.

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author avatar Songbird B
18th Nov 2011 (#)

An insightful and unfortunately, accurate portrayal of the problems generated when Staff feel they are worth more than they are paid..Great Star page as always, Kaylar..

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author avatar kaylar
19th Nov 2011 (#)

Thanks Songbird. I have found that where one should be paying $XXX but can only afford $XX then the longer paid vacation, the shorter work day 'evens' the equation

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