Wage Adjustment Policies in Russian Firms

Pay and employee intrapreneurialism in Russia, 1994–2015: A longitudinal study

“…After the 2008 crisis, Russian companies reduced salaries ‘by an average of 30%’ (Gurkov, 2013, p. 25). Simultaneously, variable pay has become ‘up to 30% of overall remuneration’ (Rozhkova et al, 2018, p. 4).…”

“…We note that Akerlof proposes wage premia as a route to employer differentiation in the labour market; the question is therefore how common this was among employers. Major studies by Gurkov (2013, p. 27) and Rozhkova et al (2018, p. 23) confirm that ‘high wage’ strategies were sometimes pursued by employers in Russia, but these did not automatically amount to an Akerlof premium. Nevertheless, it is possible that such a wage premium may have continued to operate in some firms.…”

“…Early in ‘transition’, employers sought to compete in local labour markets through positive motivation measures including premium pay. Gurkov concludes that by the late 1990s, HR practices ‘led to a decline in employees’ motivation ‘as only negative stimuli remained’ (2013, p. 24); firm responses to the 2008–2009 crisis centred on downward wage adjustments, negatively impacting employee morale (Gurkov, 2013; Rozhkova et al, 2018). Strongly hierarchical corporate cultures based on autocratic leadership styles and command and control systems reduced employees to input costs, making collaborative employment relations difficult to achieve (Andreeva et al, 2014; Dixon et al, 2014).…”