Pay freezes may highlight need for motivation in British workplaces

Date: 26/03/2009

A recent survey by the Industrial Relations Service (IRS) has found that the use of pay freezes in the workplace by management has taken a sharp rise in the current economic climate.

It was established that many companies are aiming to save money in the recession by doing this, with 28 per cent of interviewees stating that no financial incentives are being offered to employees - highlighting the need to replace them with alternative incentive schemes.

The average pay increase declared by respondents was just 2.6 per cent in the three months leading up to February.

Sheila Attwood, the editor of IRS Pay and Benefits, said of the results: "The most common pay award so far this year is nil. However, the majority of organisations are still making pay awards, albeit at lower levels than a year ago."

Ryanair's pilots have agreed to such a pay freeze for 12 months to stave off the possibility of a cut in earnings in the short-term, according to Employee Benefits, with another scheme being used to improve performance over the next year and bounce back from the lull in the economy.

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