As we continue in the tough economic climate, many companies will debate at this time of the year whether they can afford increases for their staff.

Some companies believe by not paying increases or bonuses is part of a job saving strategy. I personally question this strategy, as not every employee performs at the same level, so why should top achieving and performing staff suffer.

Other than the unfairness, although I understand the social conscience decision making process, I believe it could put the company into further risk by losing top staff through this strategy. Should your top performing staff not feel recognized through monetary recognition, which is what we all work for, they may well look for greener pastures.

The result… you retain the mid to under performers who are only too pleased to still have jobs.

Long term what will this mean? Well with a bunch of mediocre employees it can only mean the results will continue to drop, not only due to the economy, but also due to performance, so eventually everyone including ownership could be under the risk of a folding company.

Deciding not to give salary increases or even a year-end bonus is a reckless decision. Business decisions should not be around surviving today, but rather ensuring you will be around in 20 years. This means it is important to retain top talent.

Don’t paint all your staff with the same brush, reward the deserving ones, and hope the non-deserving ones will resign!