What is the freezing of the salary?

salary freezing is a measure of costs that usually receive organizations that have or predict financial problems. This type of action is one that many workers will experience at some point in their career. The process involves maintaining the monetary compensation of the employee stable, without the cost of life or merit. During the recesses, salary freezing is common, as employers are trying to reduce wage costs without resorting to release. For example, if the employer's annual budget includes an increase in cost of 5 percent every year, free salary freezing can effectively reduce budget expenses to reduce future wage costs. Do not allow merit to increase as part of salary freezing, serve the same purpose, limiting the budget increase in the current fiscal year. There may be advantages for the morale of employees and monetry of the lower line, if the freezing of the salary applies to the manager and the executive employees, as well as for employees of rank and show.

recessive period almost always involves freezing of salary as soon as the threat of recession is recognized. Froaching of salary can often be accompanied by freezing, thus preventing additional wage costs. Dose freezing is also common during recessions, saving the employer's budget for the cost of forcing increased insurance premiums such as health insurance if the costs of the employer group increase. The employer can even introduce freezing when the economy as a whole is stable or improves if the employer finds himself under pressure from the competition or the weakness of his particular sector of the economy. The potential risk of bankruptcy, regardless of the cause, usually needs to be taken seriously and solved, the coněch is available.

The introduction of salary freezing can only be the first measure to reduce the costs taken by the employer. The intention in most cases is to avoid a general dismissal that MoHlo have a clearly negative impact on employees' morale and a wider economy as a whole. The freezing itself could have unintended consequences for the employer's budget - less money placed in the pockets of their employees means less money stimulating the demand for the employer product or service. During the recession, the combined effect of numerous employers may impose a salary freezing in fact to worsen the situation-the expenditure could reduce the expenses, thereby reducing the demand for goods, which could further harm employers' balance sheets and manage additional costs. If the only other options are to reduce compensation or general redundancies, freezing salary in conjunction with hiring freezing and further reducing costs could help stabilize the employer during the unstáčas.