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"your" employee shows possession, when talking about yourself.
Besides, only a boss would be worried about not being able to make payroll. Managers don't have this problem. This one goes to the top level, da BOSS.
"your" employee shows possession, when talking about yourself.
Besides, only a boss would be worried about not being able to make payroll. Managers don't have this problem. This one goes to the top level, da BOSS.
In April your sales dropped and you got to near break even . You gave your employee a 10% raise in March which actually resulted in you incurring losses for those months
If a 10% raise for a single person is enough to tip you over the boundary from profit to loss, your payroll costs are too high. If you have only a single employee, that most likely means you don't have a viable business, or at least not a business that can support employees other than yourself.
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In May your sales declined further, your employee also started showing up an hour late, and sales now expected not to rebound . It now occurs to you that you will run out of cash flow to operate the business in 4-6 more weeks at your current rate of losses . You need to trim purchase costs
Purchase costs? Do you mean Cost of Goods Sold, aka COGS? That is typically not a viable solution. Your retail price should incorporate an appropriate margin over purchase costs, and if you are considering downgrading your supplies (cheaper cuts of meat and cheese if you are a restaurant, thinner wood if you are a cabinetmaker, etc), your customers will notice the decrease in quality, resulting in lower sales.
Plus, if a 10% employee pay raise means that you run out of operating cash in 4-6 weeks, you are not sufficiently capitalized. Assuming an employee makes $15/hour, a 10% raise is $1.50. 6 weeks of 40 hours at only $1.50 additional is a total of $360. If a $360 increase in costs is too much for you to handle, your business is not viable. A big electric bill, a broken window, or some theft will also put you out of business.
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Employee then yesterday demanded a second pay raise , and demands you take out a credit card to Venmo to pay the employee’s higher wage
Do you give the employee the raise on a credit card debt just to give employee demanded raise? Or would you
say no ? Employee has also declined in productivity and says a second pay raise will fix it
Grow a backbone. Two raises in two months? With an employee essentially blackmailing you by saying they will be a terrible worker if they don't get more money? That is not a person you want to keep around. Fire them. Now.
Aside from that, running recurring costs such as salaries on debt is super risky. Some companies can do it for a bit of time, such as Amazon. They did so for years, but they were also raising incredible amounts of money through stock offerings. Private companies that are not seeing an influx of capital cannot sustain debt fueled salaries. Private companies that do this go bankrupt.
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You explain to employee you are bound to run out of money at current rate and that you are free to leave for another comparable job as we can’t afford to pay your second raise.
Employee said “I don’t give a sh**** I want a f**in raise or I’m going to purposely slack off on the job , steal , and you’ll be sorry. You are supposed to give raises
I do think you are supposed to give raises. If they deserve it, if the company is doing well. Not if the employee threatens to steal from you. Neither is the case here. Fire that person.
In April your sales dropped and you got to near break even . You gave your employee a 10% raise in March which actually resulted in you incurring losses for those months
In May your sales declined further, your employee also started showing up an hour late, and sales now expected not to rebound . It now occurs to you that you will run out of cash flow to operate the business in 4-6 more weeks at your current rate of losses . You need to trim purchase costs
Employee then yesterday demanded a second pay raise , and demands you take out a credit card to Venmo to pay the employee’s higher wage
Do you give the employee the raise on a credit card debt just to give employee demanded raise? Or would you
say no ? Employee has also declined in productivity and says a second pay raise will fix it
You explain to employee you are bound to run out of money at current rate and that you are free to leave for another comparable job as we can’t afford to pay your second raise.
Employee said “I don’t give a sh**** I want a f**in raise or I’m going to purposely slack off on the job , steal , and you’ll be sorry. You are supposed to give raises
In the story you provide, the employee should be axed for being unprofessional and not understanding how to ask for a raise. They sound toxic.
However, Good (smart) companies pay their important value drivers whether they’re making money or not.
People can still perform exceptional and maybe losses would be even greater without them. You still have to reward exceptional employees and effort or you’ll find it even harder to return to profitability without them.
It’s why it’s a bad idea to cut bonuses or pay scales universally when a company is struggling. Your good employees can and often do walk out the door. If you cut pay or refuse raises, your good people just leave and accelerate the death spiral.
Last edited by Thatsright19; 05-20-2021 at 08:03 PM..
Even if he not the boss, and is middle mgmt, he surely ought to be able to perform all the tasks of lower level employees. Otherwise, there shouldnt be any other method of rising to middle mgmt.
If business cannot afford raises, and employees want them, either they leave, or get fired, and the left over staff picks up the work.
From OP, seems like business is actually quite small, and dont do that much volume. So there never should have been middle mgmt to begin with. The people in middle mgmt ought to be the grunts.
Even if he not the boss, and is middle mgmt, he surely ought to be able to perform all the tasks of lower level employees. Otherwise, there shouldnt be any other method of rising to middle mgmt.
Several of you missed KemBro's point....he is suggesting the OP is the toxic employee and the one demanding a raise. As in trying to see how it would go over. No actual business owner would be asking such a stupid question on CD forum.
Several of you missed KemBro's point....he is suggesting the OP is the toxic employee and the one demanding a raise. As in trying to see how it would go over. No actual business owner would be asking such a stupid question on CD forum.
Several of you missed KemBro's point....he is suggesting the OP is the toxic employee and the one demanding a raise. As in trying to see how it would go over. No actual business owner would be asking such a stupid question on CD forum.
What I wrote still applies in general.
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