Cost cutting hurts employee morale

The cost cutting measures taken by companies to tackle economic crisis, have sharply eroded morale and commitment of their employees, especially of the top performers, a study by Watson Wyatt says.

According to an annual survey by global consulting firm Watson Wyatt and WorldatWork, an association of HR professionals, employee engagement levels for all workers at surveyed firms have dropped 9 per cent since last year and as much as 25 per cent for top performers.

"The cost-cutting actions that employers have been making to deal with the economic crisis have contributed to a sharp decline in the morale and commitment of their workers, especially top performers," the report stated.

Additionally, 36 per cent of top performers said their employer's situation had worsened in the past 12 months.

The survey revealed that top-performing employees are 26 per cent less likely to be satisfied with advancement opportunities at their company compared to last year.

Moreover, they are also 14 per cent less likely to want to remain with their company, it added. The survey also found that top-performing employees are 29 per cent less confident in management's ability to grow the business.