The Telegraph’s recently released article titled “Staff morale hit as pay cuts and freezes continue” highlights the motivational challenge most companies will have to face over the next 12 months.

The Telegraph revealed that it isn’t just the fact that there are pay freezes, cuts and financial instability it is the way in which companies are communicating these to their employees. The severe lack of communication, honesty and cohesion is having a devastating impact on UK worker’s morale. The Chartered Institute for Personnel Development stated that better communication between managers and workers could see morale significantly improve. Those companies who communicate the rationale behind their salary/bonus restraints have a better chance of keeping employees on side.

One in five employers related their reward decision to an individual’s performance and just over two fifth’s of employers failed to share the reasoning behind their company’s pay cuts, thus leaving employees feeling undervalued and isolated. The Telegraph revealed that basic communication channels seemed to go out of the window towards the end of 2011. Most managers chose to ignore the issue, despite extensive research illustrating the increase in staff satisfaction levels once their pay changes were explained.

Despite 2011 seeing more pay freezes than any other year from 2008, positivity is possible – it all depends on the way managers communicate and motivate their staff. 2012 is set to be another year of “subdued pay rises” states Rewards Adviser Charles Cotton. He illustrates how 2012 will be an extremely tough challenge for maintaining staff commitment and motivation however, the key is to ensure employees are kept positive and motivated at work, as they will see their living standards hit. These revelations have sparked business leaders into action as many are now revising how they communicate their economic realities. Half of UK workers received a pay rise in 2011 and only 19% felt that it reflected their performance, this demonstrates the need for improved communication not only regarding pay rises but also with praise and positive news.

Supporting the need to revise financial communication Sky News also recently revealed that the UK will shed 120,000 jobs in 2012 – being labelled the toughest year for the UK jobs market in 2 decades. The hurdles may seem to be lined up waiting for many organisations to fall this year however, as Winston Churchill once stated “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

With January nearly behind us it is important to keep staff spirits at a high, ensuring they are engaged, motivated and aware of company goals and objectives. Communicating with staff when faced with obstacles in 2012 will have a far greater impact than burying your head in the sand. Rewards Advisor Charles Cotton states that considering workers could have received no increase or a pay cut in the current climate, effective communication between managers and staff could have seen a higher number of employees appreciating what they have got. “Only then might employees remain engaged with their work and motivated to perform well”.

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