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Study finds wage and employment freezes impact on morale

Wage and employment freezes and other actions taken to combat recessions may compromise the positive effect that employee empowerment may have on staff morale and in turn performance.

These are the findings from a new study by Professor Stephen Wood (pictured) from the School of Business and Chidiebere Ogbonnaya from the University of East Anglia, published in the Journal of Management.

Their study found strong evidence that empowering employees to make decisions has a big influence on their job satisfaction and well-being, both at work and generally. There is also strong evidence that empowerment has positive effects on both individual and organizational performance and the staff morale is a major reason why. Yet, actions typically taken by management during recessions, such as wage and employment freezes, major restructurings of jobs, and the intensification of work, may have a negative effect on individual’s morale and commitment.

The research shows that these negative effects reduce the positive gains – for both employees and employers – of individuals being given autonomy and discretion and variety in their work. The side effect of recessionary actions is to reduce the efficacy of individual-level employee involvement. This in turn reduces the performance effects of empowerment. 

The research confirms the power of involvement at both the individual, task level and the wider organizational level and that more attention should be paid to it in the debate around productivity.

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