When employees devalue what the owners work hard to build

Masimba Kanyepi

THE value of a business is not always the value seen by its em­ployees.

Imagine walking into a plant nursery intending to purchase palm trees. Each tree is priced at US$30, and you need 10 plants, bringing the total purchase value to US$300.

You approach a very ac­tive, knowledgeable and clever salesperson and explain that you would like to take the plants in the next two weeks when you managed to raise the required US$300. Instead of negotiating an acceptable payment arrange­ment within the company’s pol­icies, the employee offers to sell you all 10 plants for US$100 and release them immediately.

When you ask why, the em­ployee explains that they earn US$70 per month and that, at times, their salary takes two to three months to be paid.

In that moment, a transac­tion that initially appears to be a simple case of unauthorised dis­counting reveals a much deeper business leadership conundrum or quagmire.

The owner or the founder has invested resources, time and money into building this massive palm nursery business, nurturing the plants, being always there attending irrigation breakdowns fighting to create an asset that generates the much-needed com­mercial value. Yet the employ­ee entrusted with selling those plants appears willing to easily surrender a significant portion of their expected selling value, partly because of their own dis­satisfaction with the employment relationship.

The question is not merely why the employee is willing to sell the plants at such a discount. The more important question is this: What happens when the people entrusted with protecting a business’s value no longer feel motivated to protect it?

The owner’s investment ver­sus the employee’s perception. (The investor’s stake vs the worker’s state)

To the business owner, each palm tree represents more than a physical plant. It represents the cost of production or acquisition, irrigation, fertilisers, labour, land, maintenance, operational over­heads and the risks undertaken to bring the product to market.

The selling price is part of a commercial strategy intended to recover costs, sustain oper­ations and generate a return on investment. When an employee unilaterally reduces that price, no consultations with the owner, the decision may undermine the very economics on which the business depends.

To the employee, however, the same transaction may be viewed through an entirely different lens. The immediate concern may be personal financial hardship, frus­tration with management or a declining sense of obligation to­wards the employer.

This creates a fundamental disconnect between the true value the owner seeks to preserve and the value the employee is moti­vated to protect.

It is important to recognise that the US$200 difference be­tween the expected selling price and the proposed selling price is a massive reduction in sales value, not necessarily the company’s ac­tual financial loss. Nevertheless, the transaction raises legitimate concerns about pricing discipline, commercial judgement and the protection of company assets.

The larger issue is that a busi­ness may have valuable assets, a marketable product portfolio and sound commercial opportunities, yet fail to realise their full poten­tial because the people managing those resources do not share the same commitment to preserving their value.

The hidden cost of employee demotivation

Businesses frequently mea­sure performance through reve­nue, profit margins, stock levels, productivity and market share. These indicators are essential, but they may not fully reveal the human factors influencing those results.

An employee who feels un­dervalued and suffering from psychological contract breach, may become less attentive to the interests of the business. True love for the business evaporates and is replaced by self-interest and benefits. Several secret busi­ness subsidiaries within the own­er’s business empire will be born. In some circumstances, this may manifest itself through poor cus­tomer service, wastage, unautho­rised discounts, weak stock con­trol, failure to follow procedures or a lack of initiative in identify­ing commercial opportunities.

Such behaviour does not always arise from deliberate dishonesty. It may reflect disen­gagement, poor judgement, inad­equate training, weak supervision or an organisational culture in which employees no longer feel connected to the company’s ob­jectives.

Regardless of the cause, the commercial consequences can be significant.

Consider a business operating across several branches, ware­houses, production facilities or distribution points. If employees independently make decisions that reduce selling prices, release stock without approval or dis­regard established procedures, the cumulative impact can erode margins and weaken internal con­trols.

What appears to be a small concession in one transaction may become a recurring source of value leakage across the or­ganisation.

The challenge for leadership is that these losses can remain hidden for extended periods. Fi­nancial statements may reveal declining margins or unexplained variances, but they may not im­mediately explain the everyday decisions and workplace condi­tions contributing to those out­comes.

Employee motivation is there­fore not merely a human resourc­es concern; it can become a ma­terial business performance issue.

When quiet quitting meets qui­et firing

Returning to the nursery ex­ample, the employee’s explana­tion deserves serious consider­ation.

An employee earning US$70 per month while experiencing salary delays of two or three months may be facing consid­erable financial pressure. Basic obligations do not disappear be­cause an employer has cash-flow difficulties. Rent, food, transport, school fees and other household expenses continue to demand at­tention.

Under such circumstances, it is unrealistic for business leaders to assume that employee morale and commitment will remain un­affected.

Timely remuneration, fair treatment, recognition, transpar­ent communication and oppor­tunities for development contrib­ute to the relationship between an employer and an employee. When these elements are per­sistently neglected, trust may weaken and employees may be­gin to disengage from organisa­tional objectives.

However, understanding the employee’s circumstances should not be confused with excusing in­appropriate conduct.

An employee’s financial hard­ship does not automatically con­fer the authority to reduce com­pany prices, extend unauthorised credit or dispose of company assets on terms that management has not approved. The employee remains responsible for acting within the limits of their author­ity.

The same principle applies to employers. A company cannot in­definitely neglect its obligations to employees and assume that the consequences will remain confined to the human resources department.

The employment relationship involves responsibilities on both sides. Employers must strive to honour their obligations, while employees must exercise integ­rity, sound judgement and ac­countability in carrying out their duties.

When either side persistently fails in these responsibilities, the consequences may extend be­yond the immediate relationship and affect the performance and sustainability of the business.

The leadership question: Who is responsible for the loss of value?

The natural reaction of a busi­ness owner confronted with the nursery transaction may be anger. The immediate response may be to question the employee’s loyal­ty, discipline or suitability for the job.

Those questions may be le­gitimate, particularly if the em­ployee knowingly violated estab­lished policies.

However, effective leadership requires a broader investigation.

Why was an employee en­trusted with the sale of company assets able to offer such a sub­stantial discount without approv­al? Is the employee secretly prop­agating his own personal palm nursery trees for resale? How fre­quently is stocktaking conduct­ed? Were pricing policies clearly communicated? Were credit ar­rangements properly controlled? Did the employee understand the cost and margin implications of the transaction? Had manage­ment created an environment in which employees understood and respected the commercial objec­tives of the business?

And perhaps most important­ly, had the employer consistently honoured its obligations to the employee?

These questions do not re­move individual accountability. Rather, they recognise that organisational performance is shaped by both individual behaviour and the systems within which people operate.

A well-managed business should not depend entirely on an employee’s personal goodwill to protect its assets. It should have clear policies, appropriate super­vision, effective controls and a culture that reinforces responsible decision-making.

At the same time, no system can substitute entirely for eth­ical conduct and personal ac­countability. Even the strongest controls cannot eliminate every instance of poor judgement or de­liberate misconduct.

The responsibility of lead­ership is therefore twofold: to create conditions that encourage responsible behaviour and to es­tablish systems that identify and address behaviour that threatens the organisation.

Building a workforce that pro­tects and guards’ business value Jealously (Creating a Culture of Radical Ownership)

The solution is not simply to demand greater loyalty from em­ployees. Loyalty cannot be sus­tainably commanded while the underlying causes of disengage­ment remain unaddressed.

Business leaders must begin by treating employee welfare as an important component of organisational performance. Sal­aries should be paid accurately and on time, and where genuine financial difficulties arise, man­agement should communicate transparently and work towards credible solutions.

Employees should also under­stand the commercial realities of the business. Training in pricing, cost management, stock control, credit management and customer relations can help them appreci­ate how seemingly small deci­sions affect profitability.

Clear authority limits are equally important. Employees should know which discounts they can approve, when man­agement authorisation is required and under what circumstances goods may be released on credit.

Businesses should recognise and reward employees who pro­tect margins, minimise waste, maintain accurate stock records and identify opportunities to im­prove performance. Recognition does not always have to be finan­cial, although fair remuneration remains fundamental.

Finally, accountability must be consistent. Unauthorised transactions should be investigat­ed objectively, and appropriate action should follow where mis­conduct is established. Equally, management should be willing to examine its own decisions and correct practices that undermine employee confidence and organ­isational effectiveness.

The objective is to build a workplace in which employees are fairly treated, understand the business’s commercial priorities and recognise that their individ­ual decisions contribute to the organisation’s success or failure.

Such a culture does not elim­inate every business risk, but it creates a stronger foundation for responsible conduct and sustain­able performance.

Conclusion: Protecting busi­ness value begins with leadership

The palm trees in our example remain physical assets, but the transaction reveals a problem that extends far beyond the nursery. It highlights the tension between the value a business owner works hard to build and the value an em­ployee may be willing to protect.

Business leaders must under­stand that assets do not protect themselves. Their value is pre­served through sound systems, disciplined management and the decisions of the people entrusted with them.

Equally, employees must rec­ognise that dissatisfaction with an employer does not justify disre­garding company assets, policies or commercial obligations.

The real leadership challenge is to establish an equitable em­ployment relationship in which fair treatment and accountability reinforce one another rather than compete with each other.

A business may spend years building its assets, reputation, customer base and market posi­tion. Yet some of that value can be undermined through seeming­ly ordinary decisions made every day by the people operating with­in it.

Ultimately, successful lead­ership is not only about acquir­ing valuable assets or growing a business. It is about building an organisation in which people understand the value they have been entrusted to protect, feel sufficiently respected to contrib­ute meaningfully, and remain ac­countable for the decisions they make.

l Dr Kanyepi is a horticulture professional with nearly 20 years of experience transforming Zimbabwe smallholder farm­ers into profitable enterprises through superior genetics, good agronomic practices and market access. He can be contacted on [email protected]

The post When employees devalue what the owners work hard to build appeared first on The Financial Gazette.