Pay Freeze

Looking for ideas....we implemented an across the board wage freeze in November 2008. Although our sales have improved a bit, we are taking a "wait and see" approach before lifting the wage freeze. Our employees have been very patient and I have not heard any complaints as yet. The key word being "yet". Does anyone have any ideas about other ways we could reward our employees? I'm thinking ideas like offering our salaried employees a four day work week for the duration of this wage freeze. They would make the same salary but just work 4 days. A one time bonus for salaried or key employees? How much is reasonable? What do I do with our hourly production employees to reward them? Any help or ideas would be greatly appreciated. I'm open to any and all ideas/suggestions/concerns.


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  • Looks like you're already doing a great job of thinking outside the box on this. One caveat: if you choose to pay bonuses, be careful to maintain the discretionary nature of the bonuses. Otherwise, if employees come to expect a bonus as part of their pay (e.g., as a substitution for the pay increase they would receive outside the pay freeze), this could affect your overtime rates for FLSA-covered employees.

    As for a few other ideas, of course, these certainly won't work for all companies or all employees, but perhaps something here could be of use:

    - Along the lines of the bonuses, smaller, token rewards out of the blue for great performance, attitude, etc. can be hugely motivating. Maybe name an "employee of the week" and give him/her a $50 gift card. It's still far less than upping salaries, but can instill a lot of motivation and good rapport throughout a pay freeze. Smaller rewards on a regular basis also have the benefit of keeping motivation up over a long stretch of time, where the "feel-good" of a larger bonus might wear off a particularly harried employee if he/she knows another one won't be coming for a year or so.

    - The four-day workweek for exempts is a great idea. Another option might be to arrange telecommuting agreements if you have employees who can perform portions of their jobs from home. It's a way to reward the employee's hard work as well as let him/her know you have a lot of respect and trust in his/her resolve and self-discipline.

    - If you can't give more pay, can you give more paid vacation? Perhaps give all employees an extra week out of the year or an extra day per month, etc. Give employees a paid day off for their birthdays? Etc.

    - Does your company have a dress code? If so, perhaps give extra casual days. It may not sound like a lot, but a friend of mine was completely overjoyed to have a "casual month" over the holidays.

    - I recently read an article on about employers who were using creative means to get by on less. Nugget Market began giving employees a 10% discount on store gift cards and apparently a lot of employees began to take advantage of this -- to the extent that the store intends to keep the policy. Sounds like a win-win for Nugget. More people shopping in the Nugget store vs. competitors' stores, plus happy employees. Of course, if your company manufactures widgets and your employees don't want widgets, then this may not be helpful, but if your company can angle discounts on things your employees can use, every little bit helps.
  • Thank you Holly, for your reply. You had some great ideas. I like the idea of smaller, token bonuses and the long term motivation that may provide, verses like you said, a one time larger bonus where the goodwill intended by us wears off. I also like the idea of giving a few more vacation days. This has helped a lot. I've got a few more ideas to bring to the table now. My sincere thank you to you!
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