We all know times are tough, whatever sector you’re in. Frozen or constrained pay have become the norm, with 2012 expected largely to continue the trend. Little surprise, then, that the Chartered Institute of Personnel and Development (CIPD)’s annual survey of Employee Attitudes to Pay found that a larger proportion of employees received pay cuts or freezes in 2011 than in any year since 2008.

Keeping staff motivated during a recession is a challenge, and the stakes are high. Morale directly affects productivity, creating a downward spiral when things start to slide. So how can your workforce stay focused and positive, even when they don’t get the pay review they’ve been counting on?

The CIPD’s survey concluded that good communication is key to any decision on pay, and that employees attach even more importance to communication when the news is bad. But there’s a long way to go. 40% of employers surveyed failed to communicate the rationale behind their pay decisions. And of those who did communicate, only 15% related their decision to individual performance.

Since 2008 satisfaction has steadily fallen ─ even among employees who received a pay rise. Yet satisfaction levels rise when decisions have been explained (in 2011 doubling among those whose employer had explained their pay rise to them). But with only 19% of employees feeling that their pay rise reflected their performance, even good news could be more effectively communicated so that employees feel appreciated and understand what’s important to their organisation.

As the CIPD points out, organisations need to invest in sharing with employees the economic realities they face. You may need support from experienced communication specialists to ensure that your communications succeed. Take time to articulate exactly what you want to achieve through your communications. And make sure you have a clear picture of how your employees feel right now. From there you can consider each of your audiences, what you need to say to them, and how you are going to establish a dialogue. Create a conversation about the current climate, your employee’s performance, and what needs to happen for pay to increase. Only then will your workforce be equipped with realistic goals and the motivation to perform well.

When financial rewards are so limited, engaging each employee in honest and informed communication is essential to sustaining the loyalty and momentum that will see you through harsher times.

What communications have you implemented about pay? If you’d like to talk to an expert, get in touch on 01273 480 404