Motivation Through Paycuts

Today more than ever motivating staff is key to the survival of your organisation. However, to do this whilst implementing pay cuts can be very difficult to achieve

and sustain. We’ve conducted interviews with senior executives who “have the t-shirt” and it’s no surprise to find that it’s all about engagement, of both employees and management. Here are the key findings of the survey.

1. Develop a communications strategy

Communicate, Communicate, Communicate. Too often when implementing a pay cut management retreats to the boardroom to come up with the solution leaving staff uninformed, worried or unproductive. Communicate openly and engage staff in the process. Everyone should understand the reasons for pay change or the ‘burning platform’.

2. Procedural Justice

To fully engage employees they must see that the process of cutting pay is fair and equitable.  In that:

  • Gives a voice to employees that fully engages them in the process
  • Allows time and space for errors to be corrected
  • Consistently applies rules and policies
  • Bias is suppressed

3. Interactive Justice

Ensure that the quality of interpersonal treatment of staff by the organisation, its management and colleagues is conducted with dignity and respect. Staff should have full information on all issues that may affect them.

4. Manage Employee Values

Be aware that it’s often the case that staff engage to the level they believe their behaviour will lead to a valued outcome for them. Everyone is different and each employee may well have different priorities when it comes to their value outcomes. Coaching management to understand these values and so what motivates individual employees can greatly help morale.

5. Employee Values

We have found that there are 12 main valued outcomes as follows:

Top Three

  • Stability – Both the organisation and the employee’s current job and future prospect are secure
  • Recognition – efforts and sacrifices are recognised
  • Work / Life balance

Others (in no particular order)

  • Remuneration package
  • Challenge
  • Location
  • Opportunity to grow & learn
  • Technology
  • Excitement
  • Work environment / Cultural fit
  • Relationships with boss and colleagues
  • Reputation of Organisation

6. Incentives need not cost money

Use the 12 value outcomes to create a suite of incentives available to managers.
Some ideas that have worked include:

  • Clear and ongoing interactive communication of organisation strategy, financials and targets
  • Recognition strategies formalised and reviewed. This ranged from a simple thank you through to a fully integrated performance pay system
  • Achievement awards, widely announced where possible, for both individuals and teams
  • Reduced basic pay and benefits but increased bonuses
  • Bonuses based on cost savings or sales leads achieved for individuals and cross functional teams
  • Staff development through mentoring and “buddy” systems
  • Flexible working hours
  • Working from home
  • Job enrichment or enlargement
  • Getting suppliers or HQ to train staff on latest developments and technology

7. Staying Motivated

As with most things in life, staying motivated through pay cuts is easier said than done!
The final factor to help embed motivation is constant “best in class” people and process reviews.

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