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The cost of living crisis – stick and carrot

Blair McPherson - Former Director, Author and Blogger

The cost of living increases are certain to result in corresponding demands for increased pay. The traditional response is for organisations to say they can’t afford to meet these claims and that any increase is likely to be funded by outsourcing or down sizing. In other words job losses, management restructuring, changes in terms and conditions or mergers. HR would be advising senior management, part of the negotiating team and managing the subsequent redundancies and redeployments.

It doesn’t have to be that way. Organisations could part fund pay rises in the longer term by  making better use of their biggest /most valuable resource their people. A motivated, engaged and empowered workforce who feel great about work and feel their contribution really matters will provide a better return and a securer future than any reorganisation, new technology, or cost cutting exercise.

Leading HR professionals have been championing the business case for developing a culture and an environment which will creat a highly motivated workforce and get the best out of people. This is about a diverse workforce where everyone feels they belong and  are treated fairly. Where diversity adds something extra to the organisation.

Where managers seek to make the most of that something extra by encouraging employees to speak up, share their experiences, concerns and ideas. Where senior managers listen and seek to act on these insights. An organisation culture and environment that is epitomised by a genuine concerned for the welfare of its people not simply reducing absenteeism.

This does mean abandoning the tradition carrot and stick approach to motivating employees, it involves trusting people to get on with the job, even if they are out of sight, it means explaining the thinking behind decisions, it means opening up debate not closing it down, even if this results in people getting up set.

It means creating a safe environment for people to say what they really think without fear of repercussions  but also a place where people can be challenged. It means finding ways to judge an individual’s contribution and effectiveness rather than rewarding long hours or unquestioning loyalty. This asks a lot of managers and they will only do it if the behaviour is modelled from the top. HR have been championing the business case but senior management and the board need to lead the way.

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