There appears to be a trend in the current global recession, for a number of organisations worldwide, to elect not to give salary increases, as part of a job saving strategy. While my stance may not be very popular, I personally question the wisdom of this strategy.
I fully understand the dilemmas around social conscience versus business conscience, but believe in this instance, the risks of following one’s social conscience far outweigh the benefits. The decision not to give salary increases, may very well place the organisation’s very survival at risk. For this reason, I believe such a strategy, should never be implemented.
By failing to reward your top performers, by failing to recognise their enormous contribution in monetary terms, chances are these employees will resign. The last thing any organisation wants to see happen is to see their proverbial golden goose take flight, even worse, see a number of their top performers take flight. If this were to happen, there is a very real risk that the company would fold, placing every single job in jeopardy.
Electing not to give salary increases is reckless, irresponsible and clearly out of kilter with the need to create sustainable businesses. Surely, creating sustainable businesses, is about making business decisions that will ensure that the company is around in fifty years time? This means one needs to do whatever is necessary to retain top talent.
This begs the question - what about the rest of your employees? Remuneration should always be performance- based. Non-performers will inevitably only receive a token increase, prompting some to resign. This does not pose a business risk. I believe it is preferable to lose your bottom 10% and increase productivity among those who remain. Do you believe one should follow one’s social conscience or one’s business conscience in this matter? I would love to hear your views?