111. Employees feel talked at instead of talked to
Employees become demoralised and disengaged when they are talked at instead of talked to.
They don’t feel valued or listened to as feedback is usually met with defensiveness and resentment.
112. Employees are disadvantaged by performance reviews
Discrimination has been institutionalised in many organisations with outdated human resources policies and practices.
Employees are artificially force-ranked into the Bell Curve or normal distribution. This tool assumes that most employees fall into the average category, regardless of actual performance. This, unfortunately, forces managers to artificially categorise a high performer as a mediocre or average performer!
With an artificial and incorrect performance rating of “mediocre” applied, there is now a good reason to restructure specific employees out of the organisation due to perceived “poor performance.” This will be the most likely scenario as people age.
A survey released by TriNet and Wakefield Research found 69% of millennial workers think the performance review process needs a facelift. Roughly 62% said they feel “blindsided” by performance reviews and 74% said they often feel that they are “in the dark” about how their managers and peers think they are performing at work. And nearly half (47%) feel that receiving a performance review makes them feel like they can’t do anything right.
Human Resources researcher Josh Bersin has estimated that 70% of multi-national organisations are moving away from the outdated annual reviews to actual performance management.
Continuous and transparent feedback is the key to effective performance management. In the book Scaling Up Excellence, Stanford Professor Bob Sutton explained the need for transparency and a two-way flow of information between employees and their managers, as well as amongst peers.
113. Employees are treated unfairly
Some organisations do treat their workers unfairly. Here are some examples.
(1) Hiring employees as unpaid interns.
(2) Misclassification of employees to avoid actual payments.
(3) Docking employees’ wages if the money in the cash register doesn’t add up or if they break company property.
(4) Employers don’t pay much more than the minimum wage or provide them with adequate or additional benefits.
(5) Promoting employees to salaried or managerial positions to avoid overtime payments where they earn less money per hour than their hourly counterparts.
(6) Overworking salaried managers to avoid overtime pay.
(7) Paying cash (under the table) to avoid paying taxes and benefits.
(8) Not reimbursing employees for applicable expenses.
(9) Forcing employees to skip breaks.
(10) Denying vacation days or sick leave.
114. Employees have poor financial literacy
Financial literacy is positively associated with better financial outcomes, more efficient saving and better debt management.
According to Workplace Super Specialists Australia, 39% of workers needed to improve their financial wellbeing with only 32% considered themselves as ‘financially well’.
The research highlighted that a key driver of financial wellness in the workplace was the worker’s financial literacy. There is a clear correlation between respondents who indicated that they had strong or very strong financial knowledge and their final financial wellness score. More than one in two financially unwell individuals indicated that they had poor or very poor financial knowledge, whereas no one with superior financial wellness indicated they had poor financial knowledge.
Employees who lack financial wellness tend to be more stressed as observed by more than three in five employers (63.3%). A significant number of employers also noted absenteeism (43.3%), low morale (30%), and absenteeism (16.7%) as other consequences of poor financial wellness.
In a poll conducted by the National Financial Educators Council, 5.2% stated that they had been turned d for a job due to their financial profiles (with 18.2% responding “not sure”). Good financial literary can improve the likelihood of securing a job.
According to the National Financial Educators Council, lack of financial knowledge cost people an average of $9,724.83. Reported lifetime losses over $15,000 were reported by one out of three respondents. Nearly one in four people reported losses over $30,000 due to the lack of financial knowledge.
115. Employees are not accurately paid or on time
Employers are supposed to pay their employees accurately and on time. Laws governing pay periods and computation methods are clear.
However, MyBusiness reported that a staggering number of workers are potentially underpaid. This may be due to interpretation issues related to complicated wage formulas.
Laws surrounding payroll have become so complex that some employers may have taken advantage of this to pay their employees less. Even employees are unable to understand how wages or salaries are computed especially if they work in highly regulated industries like retail, hospitality, healthcare, manufacturing, and administrative.
For most of us, we will not bother to take out our calculators and check the computation accuracy as shown in salary statements or pay-slips.
116. Employees are underpaid
Indeed’s salary report found that only 19% of US workers felt comfortable with how much they are making at work. When asked how much more it would take for them to feel good about their salaries, 60% said they needed a raise of at least $6,000. More than half (54%) would consider changing jobs to get a pay raise and 47% planned to ask for more.
According to the 2016 Global Workforce Study, which surveyed more than 31,000 employees around the world, one in five disagreed that they were paid fairly.
PayScale found that 44% of employers say their employees were fairly paid, but only 20% of employees agreed. Their study showed that two-thirds who were being paid the market rate believed that there were underpaid and 60% who perceived that they were underpaid said they intended to leave.
Research New Economics Foundation showed that two in five people employed in the U.K. were in ‘bad jobs,’ defined as jobs which do not provide a secure, living wage. That figure rises to 54% for the self-employed.
117. Employees do not have enough money to retire on
Few people are confident in their ability to save enough money to live comfortably in retirement.
According to the Employment Benefits Research Institute, just 18% of Americans surveyed in 2017 say that they feel very confident about being able to retire comfortably. This is d from 21% the year before. Not surprisingly those who are struggling with debt are less confident. Thirty-six percent of employees with major debts are not confident about having a secure retirement, compared with 8% of employees who don’t struggle with debt.
Time reported that 56% of Americans have less than $10,000 saved for retirement. Almost half of all baby boomers (41%) have absolutely no retirement savings. And 33% of all individuals heading into retirement still have mortgages to pay, according to Motley Fool.
The average working household has virtually no retirement savings.
The National Institute on Retirement Security found that the median retirement account balance is $2,500 for all working-age households and $14,500 for near-retirement households. Sixty-two percent of working households age 55 to 64 have retirement savings less than one times their annual income. This is far below what they will need to maintain their standard of living in retirement.
Interestingly, YouGov found that 71% of Americans who save worry that they won’t have enough to retire when they want.
In comparison, SuperReview found that seven out of every ten Australians do not expect to have enough money to retire on. Twenty-eight percent had a lot of debt going into retirement.
The only solution is for people who do not have enough money to retire on is to keep working until they are eligible for social security, aged pension, or welfare payments. Even then, the benefits are sometimes insufficient and require the person to work into their 70s.
Exactly how much you need to save for retirement is an ongoing debate. One thing is clear: You’ll need more than nothing.
118. Employees are trapped in the Rat Race of Life
The Council of Graduate Schools found that those with student loan debts are more than three times more likely (13%) to incur greater levels of private and credit card debt than those without loans (4%).
CBS News reported that about one-third of US households earning at least $75,000 annually and one in four earning at least $100,000 are living from pay period to pay period.
In comparison, ABC reported that a startling one in two working Australians is living from payday to payday.
According to ABC, homes are less affordable, jobs are less secure, and a growing number of people are being forced into part-time work. More and more people are struggling to pay their bills. Because of the cost of education and poor decisions with credit cards, they are coping with low wages and a greater burden of debt.
As a result, employees get entrenched in the Rat Race of life. They stay there until retirement. They get stuck in dead-end jobs just to pay off their debts and survive day-to-day.
119. Employees are not earning enough to make ends meet
The International Labour Organization found that the overall wage growth around the world has decelerated since 2012 from 2.5% to 1.7% in 2015. It is the lowest level in four years.
MarketWatch reported that wage stagnation (or low wage growth) has taken a heavy toll on employees since the 1970s where only 51% of 30-year-olds are making more money than their parents did. And Time reported that half of those ages 18 to 24 say that they will need a side job to save enough for their future.
According to FlowingData, there are minimal changes in income growth over the past few decades for the lower and middle class (there is a slider for comparison).
In spite of increasing economy-wide productivity, the Economic Policy Institute found that wages for the vast majority of American employees have either stagnated or declined since 1979. This weak wage growth extends even to those with college degrees.
The Sydney Morning Herald reported that “there are so few workers now getting a raise that regulators are worried it is actually rewriting the Phillips curve, one of the dominant forecasting models of the economy for half a century: higher employment = higher wages because there are fewer people willing to work for less money.”
(If you want to know how you spend your income, click here.)
Hays found that 58% of Australian employers increased their employees’ salaries by less than 3%. Sixteen percent did not increase salaries at all. With Australia’s consumer price index hovering at 1.5%, there is no real growth in wages for employees.
Data from the Australian Bureau of Statistics showed that average household incomes fell by 1.6% in the year to September 2017, after considering inflation, taxes and interest costs. The Wage Price Index data also showed that average earnings were 0.7% lower in the September quarter when compared with the same period in 2011.
120. Employees are stressed and worry about finances
It is not surprising that one in three employees worry about finances during work hours, according to the Financial fitness of working Australians. Only 51% believed that they have enough knowledge to make sound financial decisions for their future (d from 57% in 2015).
Similarly, research by the Centre for Social Impact found that two million Australians are experiencing severe or high financial stress. A further 10 million are living with some level of financial worry, one in two has no savings, and one in six reported that they are just managing to make repayments on debt.
Without proper financial literacy education in schools and universities, people don’t know how to budget, save, and get out of debt. These are must-have life skills that workers require in an environment where governments control outdated education systems that produce manufacturing-type and financially illiterate workers.
According to the Sydney Morning Herald, it is not surprising that there are alarmingly low levels of financial illiteracy across Australia.
Perhaps this is the grand plan by governments to keep their citizens in the Rat Race of Life without much hope for financial freedom and comfortable retirement living through proper financial literacy education and financial planning.
Financial literacy is a huge problem where high school or secondary students aren’t financially educated. A study conducted by Champlain College showed that 27 states in the US received grades C, D or F on state efforts to improve financial literacy in high schools. High school is a particularly important time in the lives of young students who soon will be faced with decisions regarding credit, rent, salaries, major purchases, and education loans.