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A recent survey was done for our entire company on employee satisfaction and engagement. My organization scored pretty low (about 30th percentile for the firm). The biggest complaint was that salaries are too low.

Unfortunately, it has been made clear that our organization won't get any additional money for salary increases until our net income increases. (This is really up in the air when this will happen, and how much additional money our organization would actually get).

What is the best way to help improve employee morale in an organization complaining about low pay, when I have no power to increase salaries?

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    Are the salaries actually low? Or is there another problem that salaries are a proxy for? If they're actually low and you aren't a startup (which it doesn't seem like here)- you're screwed. Because if the salary is low enough that its upsetting the workers, your talented employees are one bad week away from leaving. And once that happens, you'll never raise that income. Underpaying employees is the definition of pennywise and pound foolish.
    – Gabe Sechan
    Commented May 8, 2017 at 3:37
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    Be open about it. Tell them, you would like to increase their salaries, but you all need to put in a shared effort to make this possible by increasing net income. It is either "all go down" or "all go up". Make this a team effort, make yourself a positive leader. But of course do not promise them the stars. Tell them exactly that you do not have any actual goals they need to reach to get X more money. But also, try to talk to the people who would set these goals on their behalf and try to figure out a reasonable strategy for improvement of the situation.
    – skymningen
    Commented May 8, 2017 at 10:32
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    If you cannot give them more money, would the same amount of money for less hours worked be an option?
    – Stephan Bijzitter
    Commented May 8, 2017 at 10:49
  • What country is this in? What are the average salaries? Are they competitive within the region and industry?
    – sleddog
    Commented May 8, 2017 at 12:48
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    "our organization won't get any additional money for salary increases until our net income increases" - so to put a very slightly cynical slant on it "the beatings will continue until morale improves" ... ?
    – brhans
    Commented May 8, 2017 at 13:13

3 Answers 3

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When your annual payrise is lower than inflation, you're telling your employees that they are getting worse at their jobs rather than better. That's demoralising for anyone.

'Net income' is a smokescreen. A growing company may never have a better net profit as they will be making investments for future growth. A stagnant company might suddenly get great net profits only because it can't think of anything to invest in, and is resting on ongoing revenue streams.

When the economy is down, people will sit and take it, because there's no great opportunities elsewhere. But if you don't give them a rise when things get better, then your better employees will jump ship, taking valuable experience and knowledge with them.

EDIT: If you have no power to give pay rises, the other thing that's important other than pay is conditions. Flexible working hours. Working From Home days for any reason. Self-training time. Even just Comfortable chairs. Any of these can make employees happier and willing to work for less.

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    @JoeStrazzere It does sort of obliquely. I read it as "look at paying your employees as an investment, not as a loss." But he never got around to outright saying it.
    – sleddog
    Commented May 8, 2017 at 12:43
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    Agree with @sleddog. The OP of this answer is telling how to tell OP's boss to get pay raise.
    – Nobody
    Commented May 8, 2017 at 13:48
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    A pay "rise" in line with inflation is nothing. It is being paid exactly the same, doesn't matter what the number is, it's only what you can buy with it that matters. Anything less than inflation is a pay cut.
    – Dom
    Commented May 8, 2017 at 18:33
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A recent survey was done for our entire company on employee satisfaction and engagement. My organization scored pretty low (about 30th percentile for the firm). The biggest complaint was that salaries are too low.

What is the best way to help improve employee morale in an organization complaining about low pay, when I have no power to increase salaries?

If the company collected the information in a survey then they have to have a plan for using the results of the survey. Collecting the data, and publishing the results, without using them to address issues sets the company up for failure. (Collecting the data without publishing the results is also bad).

Several different levels of management need to workout a plan to address the problems. Some problems will be localized, and others widespread throughout the company.

Assuming that pay is the real problem, and that improving salaries is the only way forward. You said that there is no money for raises, but you also said there are no defined plans relating profits to raises. That may be the clue. Make a plan. Publicize the plan. And then keep to the plan. Making sure that managements number one goal is getting the performance the plan expects.

It is also possible that local management is not doing enough to fight for their employees.

Either way the next part of the survey process is to make solid plans for improvement for all parts of the company. This may involve more surveys, focus groups, outside organizations...Ask the company what is the next step, and then ask to be part of the team working on that step.

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People tend to complain about pay when the work is not motivating. If somebody believes in what they are doing and is enthusiastic about greater goals, they do not complain. If the work is stifling and pointless, they will complain about everything, starting with the pay.

It comes down to leadership. If the leader is exciting, engaging and doing interesting things, people will be happy. Sounds like that might not be the case in your company. If the leadership is strong enough, people will work for nothing. I remember a story of Andrew Jackson, whose forces in the Crow War suffered incredible privations. One day, one of his men came to him complaining of hunger; all of them were starving. Jackson said to the man, "I will split what I have with you." and he pulled five acorns out of his pocket.

At one company I worked for we had a programmer who was far more talented than anyone else and he reported to me. He said to me, "I am still here because of you. If I wasn't working for you, I would have quit a long time ago."

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    That's not really true. Low pay is low pay. If the company is underpaying employees, all any motivation can do is put a ill fitting mask on that.
    – Magisch
    Commented May 8, 2017 at 7:21
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    @Magisch Depends on how the pay is too low. If it's a case where the employee cannot afford to live, then there's nothing that motivation can do. If it's lower than other places but the environment is a lot better then people do tend to stay.
    – Snowlockk
    Commented May 8, 2017 at 8:44
  • Tend to agree with Magisch here, the pay won't matter beyond a certain point, but if everyone is complaining about it there's definitely an issue here.
    – Thihara
    Commented May 8, 2017 at 10:11
  • One day he said to me, "I am still here because of you. If I wasn't working for you, I would have quit a long time ago." - No, he is there primarily because he is being paid MONEY.
    – Armada
    Commented May 8, 2017 at 11:53
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    @Armada You are implying the developer lied?. I don't think so, I agree with this answer, the pay is not everything. If the work sucked and the environment sucks (co-workers, manager) then there is no amount they can pay to make me stay there. On the other hand, I will take less money if it means I will enjoy my work.
    – user69461
    Commented May 8, 2017 at 12:14

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