more work for the same money

i have a friend who is in a job where he has been told that he will not get a raise this year. he did not get a raise the last 2 years, but did get a 'one time bonus' the last 2 years (will not be getting a bonus this year). his department is actually facing budget cuts, but they can sustain current salaries as long as they don't give any raises. this means that there is no incentive for him to work harder than he did this past year. it also means that his next raise (annual salary) will be based upon a number that has not changed for 3 years.

after learning this, he basically told me that he is going to pull back the reigns on his work ethic, and do only a minimal amount of work. several people in his office show up late and leave early without taking PTO, and they commonly email in at 10-11am, telling their department that they are working from home (when everyone knows there is no work being done). there isn't a huge workload in the department, but the work being performed is minimal, and the parity among the amount of work done between the 'haves' and the 'have-nots' is huge.

the question is: can i blame my friend? if you work the hardest and smartest in your office, and you are told you aren't getting a raise at all, should you pull back the reigns? should this be even more evident considering other people aren't getting raises either, and are doing 1/4 to 1/10 of the work you do?

i would say 'yes'. in this day-and-age, it is not enough to just let a person they are going to keep their job. if you tell someone they aren't getting a raise (and especially if they haven't in the past few years), don't expect retention. your workplace will become a revolving door to anyone with talent. anyone with talent is going to be motivated by both innovation, a great workplace, and money. people who are content with mediocrity in their job are going to engage in mediocre performance. without providing some sort of enticement and positive feedback to your staff, you will lose them. the only staff you will keep are the ones that are too scared to leave, and who only want safe decisions. these people are never star performers, and you'll never go far with them. it's better to have 3 amazing performers that 10 mediocre ones. the mediocre ones will get a little more done in the beginning, but they will eventually bring each other down, and will ruin each other's work environment.

i know you're thinking "but what are you supposed to do if you don't have any more money?" first of all, there is always more money. the difference between what management makes and what the normal workers make is huge. if you have to trim $10k across management to give your 5 best workers a $2k raise, then do it. management probably makes too much anyway, and they are much less important than your men in the field.

the second option is to actually analyze your workforce, and maybe get rid of unneeded workers. i have yet to work in an environment where at least 2 positions/workers were worthless. firstly, it is your fault for keeping such idiocy on your staff. second, you should trim the fat and use a small portion of the money saved to pay your workers that you cannot afford to lose. if you are in IT, and you have a manager who hasn't written a line of code in 6 months, he is worthless; i promise.

obviously, the point is moot with a bad employee. if you have someone who is invaluable, then don't give them a raise. if someone is just filling a slot (for budget), or if their job is remedial and can be taught to someone else in a day, then they are expendable. managers should know who is expendable, and if they don't, then it is the manager who needs to leave.

i told my friend to use his spare time at his job to search for a higher paying one. in the end, if he cannot find a better paying job, then his true worth is what he is getting paid. you're only worth your highest bidder. if he does leave, it will be sad, because his department will be losing a vital component.