Work #3 Mistakes employer makes

Work #3 Mistakes employer makes - Another aspect where many employers are fundamentally mistaken is in their perception of fair compensation. A significant number of employers believe they pay their workers well and fairly, when in reality, they do not. This misconception often fuels dissatisfaction, disengagement, and ultimately, resignation. If employees were truly well-compensated and felt valued for their work, complaints and turnover would be significantly reduced. Numerous studies in organizational behavior have shown a strong correlation between perceived fairness in compensation and job satisfaction (Adams' Equity Theory being a central reference point). When employees perceive an imbalance between their effort and their reward, they become demotivated and are more likely to leave or speak up. Recent meta-analyses also demonstrate that perceived pay equity not only predicts retention but directly influences productivity levels, as employees who believe they are fairly compensated tend to invest more discretionary effort in their roles.

However, in many workplace cultures, employees avoid direct confrontation or criticism of their employer. The ideal for most workers is to exit a toxic or underappreciated environment discreetly, without burning bridges or causing conflict. Therefore, when an employee does voice dissatisfaction openly, especially regarding pay, it is often a sign of prolonged exploitation—an accumulation of ignored frustrations finally reaching a breaking point. In many such cases, the complaint is not a whim, but an act of desperation, signaling that the worker has endured long-standing injustices. Industrial-relations research suggests that such public grievances are often preceded by a prolonged "silence phase," where employees suppress complaints due to fear of retaliation, until stress or injustice becomes unbearable.

A common pattern observed in exploitative work environments is the underappreciation of labor, driven primarily by an employer’s prioritization of profit over fairness. These employers offer only what is legally mandated—often the bare minimum—under the assumption that the worker will accept it due to lack of alternatives. This practice, while legal, is ethically questionable and psychologically damaging. It aligns with the theory of “profit maximization through wage suppression,” common in low-autonomy job sectors where bargaining power lies entirely with the employer. Such environments frequently overlap with labor market monopsony conditions, where employees have limited mobility due to geographic, skill-based, or contractual constraints, allowing employers to suppress wages without fear of mass turnover.

There are also more psychologically complex dynamics at play. One category of employers cannot appreciate the value of labor due to narcissistic traits or a superiority complex. These individuals perceive employees as inherently inferior and expect them to submit without question. Their refusal to meet wage demands stems not from economic constraints, but from a belief that power must be upheld by denying others any claim to equality or negotiation. This aligns with the concept of “status-based dominance” explored in leadership psychology, where some individuals derive authority not through competence, but through enforced hierarchy and submission. Research in toxic leadership models indicates that such leaders often conflate compliance with loyalty, fostering an environment where dissent is equated with betrayal, further reinforcing exploitative wage practices.

Another category of employers is simply ignorant of the labor they oversee. Their inability to evaluate or appreciate their employees stems from a lack of experience or understanding of the actual work involved. This cognitive blind spot leads to gross undervaluation, mismanagement, and unrealistic expectations. These employers delegate tasks they themselves do not understand and therefore cannot measure, reward, or critique fairly. From a managerial science perspective, this is often linked to the “Dunning–Kruger effect,” where individuals with low competence in a domain overestimate their understanding, resulting in flawed decision-making and inadequate reward structures.

However, the most harmful type of employer is the one who deliberately exploits, not for profit or out of ignorance, but out of a psychological need for control. These individuals do not merely undervalue their employees—they manipulate and overburden them as a means of asserting dominance. Often, this behavior is compensatory: they may have previously held positions of power which they lost, and now attempt to restore their sense of control by imposing it on those beneath them. This projection of personal failure onto subordinates manifests in constant micromanagement, task inflation (inventing unnecessary work), and emotional manipulation. In clinical terms, this reflects elements of maladaptive narcissism and authoritarianism, where the employer’s identity is tied to control, and any threat to that control (such as employee autonomy or dissent) is met with hostility. Occupational psychiatry literature also notes that such leaders tend to create “learned helplessness” in employees, reducing their initiative and independence, thereby perpetuating dependency on the leader’s approval.

These employers often have small teams or isolated positions of power, which intensifies their need to assert dominance. The fewer subordinates they have, the more pressure they place on them individually, using them as instruments of self-validation. The more control they have lost in the past—through career failures, demotion, or personal instability—the more intensely they seek to reassert that control in their current position. What results is a toxic dynamic in which the employee becomes the scapegoat for the employer’s unresolved frustrations and insecurities. Case studies in small-business management suggest that in micro-organizations, such power concentration can be more damaging than in large corporations, as employees lack access to HR mediation or alternative reporting structures.

Ultimately, this kind of exploitative leadership has long-term negative effects on both organizational culture and individual mental health. Research from the field of occupational health psychology links such environments to burnout, anxiety, and turnover. Addressing these problems requires a deeper understanding of employer psychology, better regulatory frameworks, and a shift in workplace values from control and profit to fairness, respect, and empathy. Interventions such as mandatory leadership ethics training, transparent pay audits, and legal whistleblower protections have been shown to mitigate these dynamics and improve overall workplace well-being.