The Metiss Group's Blog

All businesses experience highs and lows.  Though uncomfortable it’s the difficult times that make organizations stronger.  Challenging business cycles force leaders to reevaluate their processes, people, and expenses. One common approach leaders take during these times is to cut or reduce wages. As one challenged leader said, “A 5% across the board cut is what we need to get through this.”

In the social sciences, unintended consequences are outcomes that are not the ones intended by a purposeful action.  Cutting everyone’s pay, including “A” players, often causes unintended consequences.  Payroll is often the easiest expense to cut and an simple target for cost cutting leaders.  Beware of the impact this has on superstars.  Generally superstars can easily leave and find another job.  The assets a leader needs to work through difficult situations may leave if they feel their compensation is not being handled fairly.

Empower yourself to consider all the consequences of cost cutting measures and you’ll successfully weather difficult times.

This entry was posted on July 15, 2013 at 4:11 am and is filed under Leadership, Performance Acceleration. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site.