Salary Freeze

DEFINITION of '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.

BREAKING DOWN '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.

RELATED TERMS
  1. Credit Freeze

    A credit freeze, also called “security freeze,” is a freeze on ...
  2. Flash Freeze

    A sudden shutdown in trading activity on an exchange. “Flash ...
  3. Freeze Out

    An action taken by a firm's majority shareholders that pressures ...
  4. Account Freeze

    An action taken by a bank or brokerage that prevents any transactions ...
  5. Hiring Freeze

    A situation whereas an employer has temporarily put into place ...
  6. Unit Benefit Formula

    A method of calculating an employer's contribution to an employee's ...
Related Articles
  1. Financial Advisors

    How to Advise Clients with Frozen Pensions

    Financial advisors are on the front line in advising clients impacted by a frozen pension. Here's what they need to consider.
  2. Personal Finance

    What Is The Average Salary For An MBA Graduate?

    An MBA is often described as a surefire way to increase one's salary. It turns out that compensation for MBA graduates is actually more complicated.
  3. Retirement

    Don't Focus On Salary

    Total compensation is not limited to salary. Find out what else you should consider.
  4. Investing News

    Freezing Oil Production Won't Help Prices (XLE)

    Freezing oil production at current levels may not be enough to cause a meaningful change in low oil prices
  5. Personal Finance

    Which Is Better: A Salary or Hourly Wages?

    When it comes to getting paid, a salary may be the more prestigious option, but you actually could take home more being paid by the hour. Here's why.
  6. Personal Finance

    What Do Certified Financial Planners Earn?

    Individuals with the Certified Financial Planner designation enjoy an above-average salary range as well as promising current and future job availability.
  7. Personal Finance

    The Benefits of Salary Vs. Hourly Wages

    Going from an hourly position to a salaried one often comes with a big pay raise. But there are some things to think about before celebrating.
  8. Personal Finance

    The Top 10 In-Demand Jobs in America

    If you're searching for a job that's in demand and has salary increase potential, keep an eye on these ten positions.
  9. Personal Finance

    More Bonuses And Fewer Raises Affect Workers

    Companies are increasingly replacing salary increases with bonuses, much to the detriment of employees.
  10. Personal Finance

    8 Profitable Majors For The College-Bound In 2015

    Choose your college major wisely to justify the rising cost of higher education. Here are 8 majors that lead to good jobs and high salaries.
RELATED FAQS
  1. Does working capital include salaries?

    Learn how unpaid salaries affect the calculation of the working capital, while paid salaries have no effect on the working ... Read Answer >>
  2. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ... Read Answer >>
  3. What moral hazards are present with salaried employees?

    Discover that moral hazards are a common problem facing many companies today. The good news is that there are plenty of ways ... Read Answer >>
  4. What is the average salary for an accountant?

    Learn about the average salaries of various accounting positions, and see the difference that an accounting degree makes ... Read Answer >>
  5. What's the average salary of someone with a finance major?

    Learn how much you can earn with a finance degree. Decide if a business career or finance career is more appealing for you ... Read Answer >>
  6. What's the average salary of a business operations manager?

    Read about the average yearly salary of business operations managers, and find out which locations and industries offer the ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center