Brian Kazungu, 13/05/2023
Good business management is very important for the success of every institution.
This management involves planning, organizing, demonstrating, coordinating, controlling and even compensation.
Simply put, management means the effective, harmonious and progressive integration of factors of production towards accomplishment of an objective.
In this section, we would like to talk about compensation of staff members as a critical management responsibility since managers can only achieve desired results through a team of people called subordinates who do the real work on the ground.
When these subordinates believe that they are being exploited and there is no avenue and platform to address their issues, they will end up being demoralized.
These demoralized employees might reduce their effort, quit their jobs or even engage in unscrupulous activities in response to the way that they perceive you are treating them.
Some people will start to use company resources and working hours to attend to their personal issues while others can even cooperate to engage in pilferage, embezzlement and fraud among other developments.
This is a dangerous and unfortunate development because it might take long before it is discovered since these employees will have a common plight and will therefore tend to work together and cover up for each other.
I want to present this issue using an example of a small retail business, but you can try to relate this with your own type of business since the activities carried out in every business are almost similar except for titles and procedures.
Typical examples of departments that can engage in unscrupulous activities and manipulate systems in a retail environment in the event of low salaries are as follows:
Buying department – when not carefully monitored, the buying department will end up being unscrupulously rewarded from the supply side and thus does a big damage internally.
They can do this by playing blind to the quality of products they order and even through inflated prices that they can agree on.
This would therefore result in your company being flooded with wrong products or slow moving products being ordered, and thus, subsequently, turnover will drastically drop and in the worst case scenario the company closes down.
Payment/Accounts – can also favour or be influenced by the supply side and do a big damage internally as suppliers who give tips would be paid or have their payment facilitated without proper procedures being followed.
This can be done at the expense of critical suppliers who would otherwise take their business somewhere else.
The staff concerned would not be as affected as everyone else because they would have accumulated their dues already through unscrupulous means.
Receiving side cannot be spared in this development since preferential treatment in attending to suppliers would be given to those who offer some gifts and this happens at the expense of those to whom due time and attention should be accorded at that moment.
This can frustrate some critical suppliers who would in turn give your business less priority since your approach will interfere with their flow of activities in attending to their other clients.
Tills (cashiers) and Security personnel can play blind to customers who start to give them ‘tips’ for a bribe.
This will result in ‘fly-overs’ at the till point and a porous security since in this case it will be difficult and might look inappropriate to diligently verify on whether the goods have been charged correctly or not when attending to people who are catering for your basic needs.
As an entrepreneur, you should see to it that employees’ efforts and work is duly recognised because if that is not done, suppliers and other stakeholders would end up paying or rewarding these aggrieved employees at the company’s expense.
These actions would result in others working more than necessary but for no benefit.
There is also a chance that those who discover these anomalies are likely to be bought-in (bribed) so that they can play along.
This is because they will have the same problem and thus staff members might choose to cooperate and prolong the corrupt trend until the company breaks down.
It is therefore necessary to keep reviewing the salaries and benefits of your employees and to keep them updated on the financial situation of the company.
When this is not regularly done, employees may come up with their own interpretation of the prevailing developments and thus take action that they might consider appropriate.
Besides those staff members who may engage in pilferage as well as fraud and other criminal activities, there are some honest, qualified and hardworking employees who can just quit the job and move on with life if they feel unappreciated.
The loss of either the skilled and experienced manpower as well as the loss of resources will be very damaging to the enterprise so much that in some instances, it will be difficult to bring the business back to its feet after it had fallen down.
As such, there is need to consider the input of others in your enterprise in order to make sure that they are given what is fair and in due time.
The mere fact that people are not complaining is not a sign of compliance since these people could have already realised an avenue to reward themselves.
If employees feel valued and are made to feel as being part of the enterprises, they are likely to defend the institution from both internal and external threats.
People need to be made to see the future in their engagement with your organisation.
When they see themselves having a better future from being engaged by your company, they are likely to defend their territory from unscrupulous individuals since they would feel that the failure of the company to continue can result in their own hard times as well.
Never allow employees to come to think that you do not care for them in business.
When the situations are tough, you must give them feedback and let them know that you are aware of the situation and that you are doing something about it.
Remember that experienced staff members offer the best service which is good for business.
Unfortunately when you lose these experienced employees, customer service will be affected since you will always be training new people for the job and they take time to get fluent in their operations thus leading to the dissatisfaction of your clientele.
Employees who feel valued have a tendency to pass on the favour to clients and this is likely to bring back customers to do business with you and hence resulting in continued engagement.
It is this continued engagement that is the backbone of business continuity, profitability and expansion.
Failure to adequately reward your employees for their contribution can also result in you losing them to competitors.
When your competitors take advantage of the good and experienced employees that you ill-treat, they end up offering a better service than that which you will be offering and this threatens the viability of your business.
It is therefore important to note that the various people that you engage in your company are not working for you but are rather working with you but for themselves.
These people are actually investors like everyone else, they invest their time and labour in your business.
As investors, they are also interested in safeguarding and increasing a return on their labour investment in the same way that you will be looking for a return on your capital investment.
Adapted from The SME HANDBOOK written by Brian Kazungu
Amazon Book Link: https://amzn.to/3geP4ux
Author Profile: https://www.amazon.com/author/briankazungu