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The Economy: Managing Pay Expectations

One of the highly sensitive and emotional challenges of working through this economic recession is dealing with the stress associated with managing pay expectations. For leaders, it's the stress of confronting the reality that cash flow may not only call for a pay freeze - but may likely demand decisions to make payroll reductions. For employees, it's the stress of not knowing exactly how the recession will impact their paychecks. Will the pay raises even occur this year? Will there be pay reviews? Will my pay be reduced? And the biggest worry of all - will I join the ranks of the unemployed?
In times like these, pay becomes one of those icky issues capable of creating a low-level funk that interferes with morale and productivity. Moreover, it can cause contamination in your company culture as questions and concerns about pay fester.
No-compromise leaders step up in these critically emotional times to build trust. And they do this by managing expectations about pay. They step up and defuse the emotional stress about pay and job security by eliminating as many question marks as possible. The one thing the no-compromise leader doesn't do is avoid these tough conversations.
Here are a few no-compromise strategies to manage pay expectations in your company:
* Get it all out in the open: Talk openly about how the company is doing and its financial condition. If the company is encountering cash-flow challenges, engage all employees in the process of innovating new revenue opportunities and cost-cutting measures. Getting them engaged in protecting the company - and their paychecks - is a more efficient and productive use of brainpower.
* Uncertainty yields to understanding: If you need to initiate a pay freeze, deliver this news yourself and surround it with the highest level of clarity so everyone understands why you made this decision. If you need to lay people off, this too must be done with extreme clarity. Employees will support what they understand - even if the news is not what they want to hear.
* Be the confident leader: You are the keeper of your company's vision, and making the necessary tough decisions required in tough times means that you cannot and will not please everyone. Confidence and compassion must meld with no-compromise leadership.
In recent weeks, I've talked to many leaders who have adopted the no-compromise mantra and are working through their payroll challenges. Without exception, they relay how difficult it is to be a business leader right now. However, each and every leader demonstrates a resolve to lead their companies successfully through this recession and back to better times.
Pass this email on to your business colleagues, managers and friends.
Neil Ducoff, Strategies founder & CEO
payrollOne of the highly sensitive and emotional challenges of working through this economic recession is dealing with the stress associated with managing pay expectations. For leaders, it's the stress of confronting the reality that cash flow may not only call for a pay freeze - but may likely demand decisions to make payroll reductions. For employees, it's the stress of not knowing exactly how the recession will impact their paychecks. Will the pay raises even occur this year? Will there be pay reviews? Will my pay be reduced? And the biggest worry of all - will I join the ranks of the unemployed?

In times like these, pay becomes one of those icky issues capable of creating a low-level funk that interferes with morale and productivity. Moreover, it can cause contamination in your company culture as questions and concerns about pay fester.

No-compromise leaders step up in these critically emotional times to build trust. And they do this by managing expectations about pay. They step up and defuse the emotional stress about pay and job security by eliminating as many question marks as possible. The one thing the no-compromise leader doesn't do is avoid these tough conversations.


Here are a few no-compromise strategies to manage pay expectations in your company:

  • Get it all out in the open: Talk openly about how the company is doing and its financial condition. If the company is encountering cash-flow challenges, engage all employees in the process of innovating new revenue opportunities and cost-cutting measures. Getting them engaged in protecting the company - and their paychecks - is a more efficient and productive use of brainpower.

  • Uncertainty yields to understanding: If you need to initiate a pay freeze, deliver this news yourself and surround it with the highest level of clarity so everyone understands why you made this decision. If you need to lay people off, this too must be done with extreme clarity. Employees will support what they understand - even if the news is not what they want to hear.

  • Be the confident leader: You are the keeper of your company's vision, and making the necessary tough decisions required in tough times means that you cannot and will not please everyone. Confidence and compassion must meld with no-compromise leadership.


In recent weeks, I've talked to many leaders who have adopted the no-compromise mantra and are working through their payroll challenges. Without exception, they relay how difficult it is to be a business leader right now. However, each and every leader demonstrates a resolve to lead their companies successfully through this recession and back to better times.

Pass this email on to your business colleagues, managers and friends.

Neil Ducoff, Strategies founder & CEO and author of No-Compromise Leadership

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