What is the Impact of a Negative Payroll Experience on Employees?

What is the Impact of a Negative Payroll Experience on Employees?

Posted: 16/12/2020

It’s the employer’s responsibility to implement a payroll process which runs seamlessly and error free.  Employees want to feel that the employer is going the extra mile to provide them with a good employment experience, and paying on time without errors is part of that experience.  A poor payroll experience can contribute to poor employer/employee relationships and can affect both the financial and mental wellbeing of workers.


Many famous worldwide brands are now focusing on a positive employee experience as this leads to and maintains the company’s image of being a good employer in their sector.  Study has shown that there is a direct relationship between positive employee engagement in the workplace and business performance and growth.

A company’s culture is central to an employee experience and we now see a focus on the design and functionality of the office or place of work.  Emphasis on well being programs, flexible working arrangements and reward schemes all contribute to the employee experience.  Payroll forms a central role in this experience, however, problems with payroll can erode all other positive aspects.  Employees will not care if the table tennis bats are missing if their pay is late or has errors in calculations!

There is a much more serious aspect to payroll than simply collecting a salary.  Employees who are paid on time and accurately contribute to a feeling financially stability.  Financial matters form the biggest stress for employees and undermine any positive experiences at work.  Regardless of all good efforts the employer has made to make the workplace an enjoyable experience, this will all be futile if an employee’s pay has errors or is late.

The knock on effects of receiving a salary late causes anxiety and financial worry due to:

  • Direct debits and standing orders being late

  • Late mortgage payments

  • Negative impact on credit rating

  • Unnecessary interest and bank charges

  • Overdrawn accounts

  • Time lost trying to resolve issues

Often overlooked, there is a link between successful payroll and wellbeing in the workplace.  Stress and financial anxiety can affect an employee’s ability to work effectively and if payroll is poor it may lead to demotivation and lack of engagement in the workplace.  This may also be damaging to the reputation of the company and retention of staff can become difficult.  Issues regarding sick leave may become problematic and trust between employee and employer may be eroded.

With many websites now hosting employment reviews any negative experience by an employee can quickly be exposed to potential future employees, causing damage to a company’s reputation.  The opportunity to build a highly skilled team may be lost. 

Work satisfaction, commitment and belief in the company are important factors which influence the success and growth of the business.  Payroll management is crucial to a well functioning business and if not performed well can impact the business negatively. 

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