How to ... motivate staff if the salary pot runs dry

If your company is one of the many that have put a cap on salary increases (read low or no pay rise), you'll need to get creative to hold on to your current staff.

Talk it through. Chartered Institute of Personnel and Development research has found that about a third of employees whose pay has been frozen said their company did not explain the decision. Communicate quickly before feelings of alienation and antagonism set in.

Don't get unnecessarily distracted by the pay issue. Managers always think pay is more important than employees do. Studies show that interesting work is often rated much higher than a pay increase. You just have to figure out what constitutes "interesting".

Invest in your people. Ask your team what training you can give them to help them perform better and feel like they're adding to their personal stock.

Thinking of ditching the weekly fruit basket? Then think again. This type of reward costs less than a pay increase and is a reminder to your staff that you are thinking of them.

Employee motivation schemes. They don't have to cost a lot to be effective, and often work better than a token pay rise. One has only to look at the backlash suffered by Gordon Brown in 1999 when he increased the weekly pension by 75p.

Focus on day-to-day motivating factors. If an employee does a particularly great job on a project, why not give them an instant reward by taking them out for lunch - praise there and then can be very personal and uplifting.


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