Not Making Payroll
BLUF - If your company is struggling, is it okay to miss payroll regularly?
My past employer has always had a problem managing their finances. When I first joined the company and started my office, they missed payroll 3 consecutive months. Then things got better, although, whenever the soft season came around, they would have problems making payroll again.
I left the company in August. I have heard from former co-workers that several offices have been shut down, staff has been reduced by 60% and things are not going well. No surprise, since they are really a nasty bunch to work for, and their ideas always failed. During my time there, nobody stayed more than 1.5 years. Now I read this on a business blog, written by the GM and founder of the company. I know it is him, since clicking on his id takes me to the company homepage.
Per his own words
"When times are tough, morale allows you to create ‘artificial credit’, by allowing flexible payment of staff. This flexibility, whether it be late payment, delayed bonuses or equity in return for salary, means that you can weather the storm, and bounce back"
What do MT'ers think of this! Is it right under the current conditions to let your staff work hard for you when you know you do not have the money to pay them as required in their employment contract.
Looking forward to learning from you all.