By JADE LOPEZ, Cebu Gold Star Daily Reporter
A CEBUANO economist is encouraging companies here to increase the salaries and benefits of their employees as a means to improve productivity amid the challenges of the global financial crisis.
“Productivity is the key. One way to increase productivity is to lower the cost of production but it doesn’t necessarily follow that employers will cut down the salaries and incentives of their employees,” economist Perry Fajardo said.
Fajardo, who also teaches Economics at the University of San Carlos, addressed this statement to top managers of Shangri-la’s Mactan Island Resort and Spa during the recently concluded first economic briefing organized by the resort-hotel’s Human Resource department.
Contrary to what is now commonly practiced among companies where owners have to either retrench their workers or reduce their working hours to cushion themselves from folding shop amid the crisis, Fajardo advised those “surviving” firms to instead motivate their workers through attractive salary rates and benefits.
“If you increase the wage even by just 10 percent, you motivate the workers to improve on their work. Once they have this feeling of job security, productivity is increased,” he said.
“On the other hand, if you cut down their salaries and even their benefits, you only discourage them more. When you retrench one worker, it sends a negative signal to the rest of your employees and as a result, they will not give their best in their work,” Fajardo added.
Shangri-la Mactan General Manager Raymund Bragg told reporters following the economic briefing that despite a slowdown in tourism activities this year, the resort-hotel has not reduced its manpower pool of close to 1,000 employees and contractual workers.
“It’s generally slow this year for most resort-hotels but still we maintain the same number of staff. In fact, we just recently increased their salaries and benefits, including their service charge,” Bragg assured.
Bragg also echoed Fajardo’s call for businesses to protect the interest of their employees if it wants to survive the economic downturn. “Your best assets are always your people. Increase their knowledge and skills and give them the best information possible” he stressed.
Also during his presentation, Fajardo urged businesses, especially those involved in tourism, to build new strategies in order to become competitive.
He employed the use of the “Kaizen Approach”, which means that a business entity should raise its objectives even higher than what it has originally set.
“Your competitor will benchmark you according to your objectives. Once you stop aiming high, your world stops,” Fajardo concluded.