Salary Freeze

What is ‘Salary Freeze’

The action of a company suspending salary increases for a period of time. By freezing salary increases for a given period, management is hoping that the company will be able to produce better bottom line results by keeping fixed costs controlled. The downside of a salary freeze for a company is that employee morale will typically take a hit and the firm may end up losing valuable employees due to compensation issues.

Explaining ‘Salary Freeze’

A salary freeze typically occurs when a company is experiencing financial difficulties. It may choose to freeze salaries temporarily in order to minimize layoffs. Once the company is in a better financial position, the salary freeze would likely be lifted.

Further Reading

  • Reinventing school finance: Falling forward – [PDF]
  • Financial crisis, austerity, and health in Europe – [PDF]
  • Economic Stabilisation in Argentina: The Austral Plan – [PDF]
  • The economic crisis and its effect on libraries – [PDF]
  • Comparative approach on education and healthcare in Romania and Bulgaria as beneficiaries of the IMF financial assistance – [PDF]
  • Portugal and the global financial crisis: short-sighted politics, deteriorating public finances and the bailout imperative – [PDF]
  • Weathering the storm? Multinational companies and human resource management through the global financial crisis – [PDF]
  • The impact of pension freezes on firm value – [PDF]