Need to cut or freeze pay of your employees? Providing work–life balancing practices can help if maintaining employee morale is a concern

Abstract

PurposeResearch on the effect of pay cuts/freezes on employee morale is limited. More importantly, past studies examining this relationship tend to focus on fairness perception as a mediator. This study hypothesizes that work–life conflict also mediates the negative relationship between pay cuts/freezes and employee morale.Design/methodology/approachA total of 13,139 employees in 1,830 workplaces in Britain in the 2011 Workplace Employment Relations Survey were analyzed.FindingsThe analyses confirm the above hypothesis. The results also demonstrate that this mediating mechanism can be mitigated to some extent when work–life balancing practices are available, but much more strongly when they are actually used.Practical implicationsIf possible, organizations should provide and encourage employees to use work–life balancing practices when employees' pay needs to be cut or frozen if maintaining employee morale is a concern.Originality/valueOur study highlights the need to incorporate various theoretical frameworks, and not just the dominant justice/fairness theories, into the study of pay cuts and freezes. The current research demonstrates that the work–life conflict framework can also be applied to understand the relationship between pay cuts/freezes and employee morale.