Down Economy Brings Tough Decisions for Employers This Bonus Season, According to Hay Group

Business Wire, Oct 24, 2008

- Hay Group Offers Five Things Companies Should Avoid -

PHILADELPHIA -- The end of the year brings bonus and performance review discussions for many employees, and this year the economy has prompted talks of slashing bonuses and layoff announcements. Many companies are also asking employees to do more with less, according to Hay Group, a global management consultancy firm.

"Times like these can prompt knee-jerk reactions and irrational decisions that can leave employees with a bad taste in their mouth," said Tom McMullen, U.S. Rewards Practice Leader for Hay Group. "Companies need to avoid making hasty decisions due to current economic situations, and consider the longer-term effects on employee engagement, motivation and performance. Many companies are being more prudent with compensation and bonuses, but if employers don't play their cards right, they may find themselves without a full house when the economy turns around."

According to Hay Group, the coming months are going to be tough for employers trying to balance suffering performance and a down economy with the need to reward and motivate employees for their efforts during the year.

Five things companies should AVOID as bonus and performance review season approaches:

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"As companies tighten their belts during tough times, it's important to remember that money isn't always what matters most to employees," said Mark Royal, a Senior Consultant with Hay Group Insight, the employee and customer research division of Hay Group. "Sure, if employees feel they are significantly underpaid - and their pay doesn't reflect their contributions - their motivation suffers. But when it comes to encouraging employees to pour discretionary effort into their work, the chance to make a difference and be recognized for their contributions can provide a much stronger incentive. Unfortunately, only 49% of non-management employees report that their contributions are recognized by their company when they perform well."

About Hay Group

Hay Group is a global consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 88 offices in 47 countries, we work with over 7,000 clients across the world. Our clients are from the private, public, and not-for-profit sectors, across every major industry and represent diverse business challenges. Our focus is on making change happen and helping people and organizations realize their potential.

For more information, including requests for interviews, please contact Aven James at 212-584-5472 or aven@blisspr.com, or Gretchen Steinmiller at 212-840-1460 or gretchen@blisspr.com.