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As an employee, which would you prefer?
A 5% across-the-board pay cut for all employees, including you 57%  57%  [ 13 ]
A 5% reduction in force (i.e. layoffs), probably not including you 43%  43%  [ 10 ]
Total votes : 23
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 Post subject: Pay Cuts vs Layoffs
PostPosted: Mon Aug 15, 2011 4:47 pm 
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Just curious based on some blog posts I've been reading about wages and unemployment.


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PostPosted: Mon Aug 15, 2011 4:52 pm 
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I voted 5% pay cut, with some caveates.

As long as I felt the management was doing a good job of only keeping quality people employed already, and that there wasn't 5% worth of dead weight in the company.


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PostPosted: Mon Aug 15, 2011 5:13 pm 
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Selfishly, assuming I was staying, I would want the company to do what is in it's long-term best interest.


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PostPosted: Mon Aug 15, 2011 5:17 pm 
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Already been through that, at a 15% cut. for almost two years. We survived. I'd rather keep people working and contributing to the world. Being unemployed sucks big green rocks.

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Mon Aug 15, 2011 5:17 pm 
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We're already understaffed and overworked. the last thing I want is to lose even more people.

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PostPosted: Tue Aug 16, 2011 7:07 am 
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I work for a company that has been around for over 75 years and has had 3 RIFs in that time so I am assuming if we are doing one it is because we've determined we've got too many bodies so I voted for the RIF.

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PostPosted: Tue Aug 16, 2011 7:34 am 
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Cut off the worst workers - always.

What the hell? People are not equal as employees. Why punish the most productive and make them more likely to go someplace else which just makes the stability of the company worse for all the other employees?

The things people do that are destructive because they are being nice is just insane. Yeah foul up the company so it goes under so you don't have to feel bad...boo hoo hoo.

I am staying, I am consistently in the top 5% of workers in any job I've had. I take a pay cut because others aren't doing this - I walk. Hey look increased stress on other employees increased costs hiring and training a likely sub par replacement.

Good job idiots!

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 8:06 am 
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If people are going to be fired for sub-standard work, that's a separate issue, IMO. If all workers meet the standards set, why should they be fired/laid off? It's a business decision the company has to make, but if an employee is meeting the standards set and still gets canned, he has a legitimate beef.


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PostPosted: Tue Aug 16, 2011 8:09 am 
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Because you won't raise standards if you don't continually have a process to retain/promote your best 25% and constantly cut out your worst 25%.

A company must always move forward - stagnation is death.

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PostPosted: Tue Aug 16, 2011 9:10 am 
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As an employee, a 5% pay cut only actually ends up being a 3-4% decrease in take-home pay. meanwhile, a 5% decrease in staffing gives a chance for being laid off, and even if you stay, results in 19 people doing the work of 20 (a greater than 5% increase in workload.)

I'd take the pay cut.

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 10:06 am 
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This totally depends on what type of work the employees are doing. If it's a sales division, you should cut the bottom 5%, if it's something like R&D or maintenance you're better off with a pay cut.

IMHO, it is fairly unethical to lay out productivity standards for employees and then still fire employees that meet them.


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PostPosted: Tue Aug 16, 2011 10:11 am 
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Don't settle for being in the bottom 5% of the employee pool in your company.

I'll take lay-offs.

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 Post subject: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 10:13 am 
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As someone whose been laid off a couple of times, I know it's cold comfort at the end of the day sometimes, but there is a big difference between firing and laying off.

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 Post subject: Re:
PostPosted: Tue Aug 16, 2011 10:16 am 
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Rynar wrote:
Don't settle for being in the bottom 5% of the employee pool in your company.

I'll take lay-offs.


Well, that depends on where you're working. You don't think there's not some division of some company somewhere where 95% of the workers are more talented/skilled than you are? I'd still rather work for that company than go for a less prestigious one where my "rank" goes up.


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 Post subject: Re: Re:
PostPosted: Tue Aug 16, 2011 10:30 am 
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Xequecal wrote:
Rynar wrote:
Don't settle for being in the bottom 5% of the employee pool in your company.

I'll take lay-offs.


Well, that depends on where you're working. You don't think there's not some division of some company somewhere where 95% of the workers are more talented/skilled than you are? I'd still rather work for that company than go for a less prestigious one where my "rank" goes up.


You may not always be the smartest, or the most dynamic, but you can always choose not to let anyone out work you.

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 Post subject: Re:
PostPosted: Tue Aug 16, 2011 10:49 am 
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Rynar wrote:
Don't settle for being in the bottom 5% of the employee pool in your company.

I'll take lay-offs.

And sometimes the layoffs target the best employees (usually the most highly paid). A few employers back, we had 3 ranks of Analysts. You got hired in as an Associate Analyst, then Analyst and then Senior Analyst. When layoffs came, they slashed everyone who was a Senior Analyst.

I agree its a moronic way of doing things, it isn't to say that it doesn't happen.


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 Post subject: Re:
PostPosted: Tue Aug 16, 2011 10:55 am 
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Rynar wrote:
Don't settle for being in the bottom 5% of the employee pool in your company.

I'll take lay-offs.


Layoffs aren't always handed to the bottom 5% of employees.

There are so many different factors that go into their choices, including "diversity quotas" (if you really want your stomach churning), and other similarly useless criteria. (Hey, if you're black woman with a disability, you're never getting fired. You're a diversity goldmine. But if you're an able-bodied white man? Watch your back.) You cannot count on just being an excellent employee to be the deciding factor. Heck, sometimes it's a deciding factor in a way you won't appreciate. The best employees tend to get the highest raises, which over time tends to give them the highest salaries. Companies often get more bang for their buck by laying off those guys. Sometimes companies have a policy of just laying off those with the least seniority, which means some new guy who may be the best employee they have gets the shaft because some fat-cat lazy *** who's been in his job for 10 years without a promotion has seniority on him. Too much of the layoff decision is out of the control of the employee.

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Last edited by Talya on Tue Aug 16, 2011 11:15 am, edited 4 times in total.

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 10:56 am 
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Xequecal wrote:
This totally depends on what type of work the employees are doing. If it's a sales division, you should cut the bottom 5%, if it's something like R&D or maintenance you're better off with a pay cut.

IMHO, it is fairly unethical to lay out productivity standards for employees and then still fire employees that meet them.


So if a company is bleeding money they should just keep slashing salaries rather then reduce staff? Wouldn't that just result in your staff leaving because they are underpaid?

TheRiov wrote:
And sometimes the layoffs target the best employees (usually the most highly paid). A few employers back, we had 3 ranks of Analysts. You got hired in as an Associate Analyst, then Analyst and then Senior Analyst. When layoffs came, they slashed everyone who was a Senior Analyst.

I agree its a moronic way of doing things, it isn't to say that it doesn't happen.


In my experience people who have the highest title aren't necessarily the best. Technologies and methodologies change and people who are the highest ranked are traditionally your oldest and unless they are keeping up to speed with the latest industry trends they could be terrible at their jobs.

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 10:59 am 
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Hopwin wrote:
So if a company is bleeding money they should just keep slashing salaries rather then reduce staff? Wouldn't that just result in your staff leaving because they are underpaid?


Chances are, they are not going to be underpaid. Especially in a market where people are considering layoffs.

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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 11:17 am 
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Go to work for the government, where you're more likely to die on the job than be fired.

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PostPosted: Tue Aug 16, 2011 11:19 am 
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Too many variables, but in general...

As an employee, I'd probably lean toward the 5% pay cut.

As a manager, probably toward the 5% layoffs.

The reason is, as a manager, the LAST thing I want to do is piss off my good employees. If you start cutting pay and other benefits, guess who is most able to find another job quickly? Your good people.

Unless you're a really small firm, there's nearly always some dead weight, and usually some good people in low demand areas that you can survive without.


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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 11:21 am 
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Hopwin wrote:
In my experience people who have the highest title aren't necessarily the best. Technologies and methodologies change and people who are the highest ranked are traditionally your oldest and unless they are keeping up to speed with the latest industry trends they could be terrible at their jobs.


I don't disagree Hopwin. But no analysis was done on performance reports. It was simply "anyone with X job title is let go." I'm not even suggesting such silly methods of trimming staff are commonplace, though they obviously occur some times.


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PostPosted: Tue Aug 16, 2011 11:24 am 
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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 11:30 am 
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Hopwin wrote:
So if a company is bleeding money they should just keep slashing salaries rather then reduce staff? Wouldn't that just result in your staff leaving because they are underpaid?


I think the better question is, if every employee is meeting their quota, how the hell is the company bleeding money? You should probably find that problem and fix it instead of firing people.


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 Post subject: Re: Pay Cuts vs Layoffs
PostPosted: Tue Aug 16, 2011 11:35 am 
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Xequecal wrote:
Hopwin wrote:
So if a company is bleeding money they should just keep slashing salaries rather then reduce staff? Wouldn't that just result in your staff leaving because they are underpaid?


I think the better question is, if every employee is meeting their quota, how the hell is the company bleeding money? You should probably find that problem and fix it instead of firing people.


Yeah, that's what I meant when I said there were too many variables. One must assume that either demand has dropped (production is too high), there are inefficiencies, or there are sectors of the business that are not performing as well as others. Otherwise, your business would be doing ok.

Each of these would require different solutions. If it looks temporary, 5% pay cuts may be better. If you're a newspaper, 5% (or more) layoffs would be a better solution, since you're not predicting it to rebound soon.


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