Lifescripts, 3rd Edition

72Cutting an Entire Staff's Pay

STRATEGY

Ironically, it's easier to cut pay across an entire department or company than it is to cut a single person's pay. That's because spreading the pain makes it clear this is an economic measure. No matter how fervent your denials, a person singled out for a pay cut will see it as an attack on their personal value. Your goal in a department‐wide cut is to mitigate damage to morale and get the team to focus on the job‐saving nature of the cuts. Department or company‐wide reductions should be presented in a group meeting. Bringing in an entire department and announcing a comprehensive cut can have the ironic effect of increasing team togetherness: they are all sacrificing for each other. It also prevents the backstabbing that could result from a series of one‐on‐one meetings in which employees might offer up one of their coworkers as a sacrificial lamb. Cuts should be announced as soon as possible after the decision has been reached so the news doesn't leak. Schedule the meeting for a Friday afternoon to avoid a week's worth of sulking. Cuts should take effect immediately to signal the urgency of the effort and to make it clear there's no flexibility. Explain that the situation will be reviewed in six months to see if the cuts can be restored. Be completely truthful about the extent of the cuts because the news will leak out eventually. If cuts are company‐wide, say so. If they are limited to specific departments, explain why.

TACTICS