The paycheck received at the end of the week or month is intuitively the obvious motivating factor behind the daily pattern of life of anyone in the workforce. But this paycheck can mean different things to different people.
For some, it may be the rent on their home and the food on their table; for others, it may be a family vacation to the beach; and for yet others, it may simply be some additional pocket money.
The Effect of Increased Fixed Pay
Therefore, while money provides an incentive for everyone to undertake a job, the degree of the incentive varies. Taking a look at the diverse demographic at any workplace, one can say that a fixed-date salary disbursement being a motivator is very much contingent on the socioeconomic background the employee comes from.
Because a company’s production is heavily reliant on the productivity of workers, it is critical to encourage people to reach peak performance. Incorporating effective pay into compensation packages is one tool used to give employees incentives to enhance efficiency.
Reasons Why Salary Disbursement on a Fixed Date Motivates Employees
This also depends on the reason behind them getting employment. Some may be the sole breadwinner of their family; some may work part-time to supplement the family’s income; some may be students working part-time to pay for their education; while for others a part-time job is just to put something on the resumé. So the urgency of salary is not the same for the last demographic as it is for the first one.
Having said that, salary plays more than one role as an aspect of the employer-employee relationship. A fixed-date disbursement can certainly be a great motivator for those with an only earning source.
Budgeting: It helps them be consistent with a budget and save accordingly, which ultimately gives them a sense of stability in relation to their job. Their satisfaction with the job and employer is mostly parallel to the nature of their remuneration. So a fixed-date salary disbursement can have the most meaning to their work-contentment.
For people whose sole dependency is not on the payment of a particular job, a fixed-date salary distribution can still add value to their relationship with the employer and company.
A workplace that has a consistently good reputation of paying up its employees on time garners their trust and respect.
Reliability: The employees are more likely to find their employers reliable, hence their commitment to the job strengthens. They have a strong loyalty towards their employer and are less likely to migrate to another job. Employees benefit the organization as a whole when they have a good, healthy relationship with their employer.
Long-term productivity: Studies show that the employer-employee relationship has a direct effect on long-term productivity and employee retention. As the net productivity of the company goes up, it generates more revenue enabling the employer to streamline salary disbursement on a fixed date. Fundamentally, it creates and maintains a healthy cycle of work and wage.
Turnover costs business money; according to sources, it costs anywhere from 16% to 20% of an employee’s yearly pay every time an employee leaves. SD Worx, a global provider of HR and Payroll services, revealed that “65% of employees do not feel recognized at work as a result of delayed payrolls”.
Why Employees’ Can Feel Demotivated And How It May Affect Their Productivity
Employees may feel underappreciated and devalued as a result of late payroll processing, and they may grow alienated and separated from the company. As a result, this personnel are underproductive and make 100 times more mistakes than their engaged counterparts. For businesses, this means wasting 100 times more time, money, and energy on a resource that isn’t willing to deliver.
But then again, to replace an employee costs at least one-fifth of their pay. For big businesses with significant staff turnover rates, this cost may be enormous.
Separation expenses, additional overtime, and other expenditures such as onboarding and training would all be included in the cost of replacing an employee. Employees who are engaged are 87 per cent less likely to leave their companies than those who are detached.
Once the salary sheet is readied, payable amount of salary or wage can be disbursed to workers or employees using any of the following methods of payment:
Credit to Employee’s Account:
This form of payment is often used by smaller firms where the number of employees is less. The person in charge or the accountant transfer the money directly to the employee’s account.
Report of Direct Debit:
This wage payment technique is the most often used in midsized as well as big businesses. With the advent of technologies, many businesses now use the direct debit method. A summary of monies payable to workers is prepared and forwarded to the industry’s banks for disbursement underneath this procedure.
Banks typically establish agreements with businesses that allow them to offer salary accounts to their workers. This approach ensures that wage payments are made quickly and without difficulty.
Organizations that do not choose the facilities mentioned above prefer to use check payments to track salary expenses. This method is also suitable for the first monthly salary payment for newly hired employees and the account opening is relatively time-consuming.
The delay over time could be in motifs extending from inadequate tests sent for opening accounts or imbalances in the details of employees. The controls can be sent to the company’s bank account for payment or delivered to employees per person who will be deposited in their respective bank accounts.
Cash payment is a preferred form of wage delivery in the ‘not=so-organized’ sector – mainly where contract workers, semi-known or unqualified workers are used. Employees who work in the unorganized sector prefer cash payments on other methods. Cash payments allow these employees to immediately satisfy their daily needs.
Salaries vary around the prescribed minimum salary or a little more. Employers ensure you get the impressions or thumb of workers’ signatures in a salary record, as proof that validates the payment of the salary made in cash.
There are more modes of payment such as using apps like Bkash, Nagad, and so on. The mode of payment differs from organization to organization and within types of employees.
In conclusion, ensuring that employees are paid on time and that their dues are always settled is a great way to avoid workforce inertia and lowering turnover rate, as well as encouraging employee engagement. This, of course, must be accompanied by various forms of involvement that go beyond financials. Investing in payroll software that allows finance staff to make timely and accurate payments, more specifically a fixed-date payment is a good place to start.
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