Similar actions will become more common shortly, says consultancy group Watson Wyatt. The results of an August survey point to at least some backtracking. Almost 25% of firms that stopped contributing to 401(k) plans anticipate they will start again by December; some 33% of companies with salary freezes, and 44% of those with pay cuts, look forward to lifting restrictions by the end of the year. (In the previous survey in June, only 17% and 30%, respectively, foresaw a return to normalcy.)
Anyway, what can you do now? If there was a pay reduction during the year, if at all possible, get rid of it, at the very least for those workers at the bottom of the totem pole. After all, does taking 5% from an employee who makes less than $25,000 a year (or approximately $12 an hour) help your bottom line all that much? Management can probably answer 'yes' if it's in charge of a tiny company (or if it's a larger one in extremely bad shape, in which case it's only putting off the inevitable).
Psychologists' tests have borne out, time and again, that one's "quality of life" at work isn't dramatically improved by monetary means.
In general, an employee gets used to a higher salary or bonus after a time and will no longer think of it as an incentive. (Perhaps those behaviors will be altered by this recession.) We've mentioned the power of small acts here before. Install a Friday morning breakfast scheme, or a small company or division outing on a weeknight. You'd be amazed how much goodwill that will buy you….
Unless it doesn't. Inc.com posted the conclusion of a survey conducted by the International Association of Administrative Professionals, which revealed that "there is often a disconnect between the type of appreciation employees want and what their managers think they want." Other consultants agree. Debra Condren, founder of Manhattan Business Coaching, says "It's important to give people face time and basic human appreciation on a regular basis." Virginia-based Rick Maurer agrees, but cautions "If you say 'thank you' all the time, even when people do mediocre work, you won't build an environment where people (can) handle criticism."
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So, to sum up: Your employees need to be recognized, especially in tough times. But make sure it's the kind of recognition they really want. And if in doubt -- ask! They'll remember the gesture(s), and they'll be glad to give more than required even when their jobs (and the company's future) aren’t on the line.
Todd Obolsky has covered a wide range of industries for Vault’s print and online company profiles (including consumer products, government, non-profit, retail, advertising, internet, energy and publishing) and manages Vault’s Layoff Tracker. He has also written for Penguin Group’s Rough Guides and DK travel series. He holds a BS in Mathematics from Bucknell University and an MBA (with a market research concentration) from City University of New York’s Baruch College.
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