While tough budget decisions are sometimes necessary to effectively running a business, communicating these decisions to employees often damages employee morale. Bruised egos, resentment and hurt accompany news of salary freezes, lost bonuses and denial of funding for a particular project; often, these emotions can create an environment of fear and distrust when left unacknowledged. If your company needs to tighten its belt, here are a few tips to keep in mind when imparting this information to employees.
Most people have an emotional relationship to money
For many people, professional worth – often defined as what their company is willing to pay for them, as well as opportunities for promotion – correlates directly with their personal sense of worth. Meaning, some employees experience the loss of money as the loss of professional status, which in turn begets a devaluation of their personal worth. When disclosing a salary freeze, for instance, keep in mind that your words may be interpreted emotionally, not logically. Be prepared for questions like, “What did I do wrong?” and “Why me?”
A job is not just a job: it’s an identity
Right or wrong, many employees over-identify with their positions and root a great deal of their self-worth in their professional roles. Therefore, anything that threatens that job directly threatens the employee’s identify. Even if the employee holds on to his or her job, a siege mentality often manifests. Be prepared for anger, passive aggressiveness, sarcasm, checking out and in extreme cases, aggression.
Keep an eye on your own projection
Although it may sound counter intuitive, firing people is much easier than telling people that they have to go another year without a raise or a bonus. Why? Because once an employee has been fired, they leave the office. When communicating less than positive financial news to your employees, watch any tendency to project your own fear or distaste on to the situation.
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