‘Unfair’ pay freezes may not damage worker loyalty, says workplace expert

London, 13 July 2009. Just half of employees (51%) thought their pay was fair before the current round of freezes, according to the views of hundreds of thousands of employees collected by ETS, the employee survey organisation. However, ETS believes that people may accept not getting a pay rise in favour of job security.

Pay freezes are increasingly common: the Audit Commission is advocating them for the public sector and a CBI survey says they are either planned or in place for most companies.

“In better times, employees strongly resist efforts to cut or reduce their pay. While we expect to hear loud complaints when pay is frozen, we believe people may accept it as the price for keeping their jobs.,” said Betsy Travis, Chartered Occupational Psychologist and Senior Consultant at ETS.

The figures that ETS is releasing for the first time today reflect the views of hundreds of thousands of employees’ views between 2000 and 2008. Happiness with pay has increased over the last nine years, with 38% of workers agreeing that their basic pay was fair when asked in 2000, rising to 51% by the end of 2008.

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ETS expects a fall in the percentage who believe their pay is fair, but a modest fall as people rationalise it in the current economic situation, meaning that it will not have a major negative impact on overall worker loyalty. ETS will release these figures when they become available in December.