Employees are not happy with the annual salary increment and company owners are not willing to give more. What can the manager do to bring employees and employer to win/win position.
Management’s job is to mediate between the two parties and try to broker a deal that is fair to both.
I assume the owners have been made aware of the market rate for this type of work, and rates paid by other companies in the area who could poach their staff, cost of retraining staff etc
And that the employees have been made aware of the market conditions, and the reasons why more can’t be paid in the annual salary increment.
If that has all been done, I would ask the employers to write a statement, explaining that this is all they are willing to pay, and justifying it. Perhaps they could explain market conditions, that sales and profitability are down /static/up only x percent. This will force them to justify the figures and offer them an opportunity to explain their rationale.
The employees need to understand that any annual salary increment has to be earned. The company owners are entitled to take a share of the profits for the use of their capital, expertise and risk taking. If they do not maintain enough profit to encourage them to continue in business, then the business will cease to exist, and the jobs will disappear.
One of the options available to the owners is to cut back on staff, pay the remaining staff more, but demand more productivity.
Perhaps some form of incentive can be devised for future years in the form of incentives, bonus, profit share.
Best of luck with this difficult negotiation.