Facing a Financial Crisis: How Can We Motivate Our Team Without Salaries?

Dear HR,

Due to some financial crisis, we haven't been able to provide salaries for the last couple of months. As a result, employees have become demotivated, showing irregular attendance, taking excessive leaves, and logging in late frequently.

I would appreciate guidance on how to motivate the staff and ensure their punctuality.

Regards,
Anusha

Leadership in Times of Financial Crisis

First, it is a sad situation, and leadership of the highest nature is required to guide employees. I suggest that top leadership should meet with employees to openly discuss the problems the company is facing.

The top leadership should also refrain from drawing salaries during this period and only receive their pay after the last employee is compensated. The role of HR is challenging in such cases, and at a lower level, there is little that can be done to alleviate employee worries. However, the actions and attitude of top bosses can make a significant difference.

A little bit of tardiness and disinterest should be overlooked. If employees are not paid and are uncertain about when they will receive their salaries, it is normal for them to lose interest and look for other job opportunities. Encourage your HR boss to motivate the CEO, MD, or chairman to engage with the staff.

The Importance of Timely Salary Payments

Salaries are to be paid on time as per statutory laws. When salaries are not paid for a couple of months, employees tend to become irregular at the office, and their morale drops significantly. Even if you are unable to pay the full salary, it is crucial to ensure that a partial salary is released to all employees.

In the Indian scenario, the middle-class segment heavily relies on their salary for monthly expenses. Unlike in foreign countries, the habit of saving for retirement is not prevalent in India, except for statutory deductions like PF, which are insufficient.

Steps to Address Salary Delays

Please discuss the payment of salaries with your management, and aim to determine an early payment date. Call all employees for a meeting and ensure that someone from top management assures them about the payment of salaries and explains the company's future in terms of projects or work orders. Otherwise, employees may start looking for new jobs and leave.