Pay freezes and motivation – what to do?

June 14, 2014

Many businesses have had pay freezes for a few years, and there remains a constant debate about the impact this is having on staff morale, motivation and retention. My suspicion is that retaining staff may not be a major problem at the moment, as the jobs market still seems at a low. Although employers may not be seeing their staff leave as a result, my concern is that although staff are staying in their positions, they are not giving current jobs their all. Once the economy improves, employers may find their staff looking around to find a new employer who better meets their needs.

Salary is not the main motivator

All too often managers look to salaries as a means to enhance staff productivity, moral and motivation. Unfortunately this way of thinking provides short-term fixes. At best a pay rise gets a very short term positive response that soon wears off and leaves the employee back where they started.

This issue is then compounded by the affect that this can have on other members of staff. Those who don’t get a pay rise may see the pay rises of others as unfair, having a negative effect on their motivation.  Not surprisingly when employees are asked what makes a good employer for them, salary is seldom top of the list. What is important to maintaining employee motivation, commitment and probably retention? Here are two ideas for managers and bosses to consider:


Make the job challenging and interesting

Employees need meaningful and challenging work. Management action: Ask staff about their jobs and how they contribute to the success of the business. By understanding where the business is going and how they are contributing to it, staff will feel an increased sense of importance, having a positive impact on their motivation and commitment to the business. Introduce the concept of continuous improvement and the role staff have in making the business more effective.


Employees need management that assists and supports. Management action: stop telling staff what to do and ask them how the work can be done, being willing to provide them advice and support.


My experience tells me that these actions are not a ‘quick fix’, and they need time and effort. But they really do help to motivate staff, and reduce the stress and frustration in the workplace. As a result of these actions, Gullup have measured greater commitment to performance improvement has increased profits by 19%!