More About Jim’s Situation
by Miki SaxonLast Friday I described a problem that “Jim” had called me with and asked you to offer up ideas that Jim could use.
In a nutshell: Jim is an executive and his CEO planned to scale necessary pay cuts so that young, single employees would take the biggest hits and those with children the smallest. Jim questioned the legality in terms of reverse discrimination, but worse he believed that the differences would become known and that would destroy employee trust and decimate the company’s culture. He wanted ideas on what to do.
In the first round of comments everyone agreed that Jim shouldn’t say anything, but also agreed that it was unlikely to remain a secret.
Everyone commented that what Jim could do was dependent on how open his CEO and the culture was—I assured them that Jim had indicated that it wasn’t a done deal and that she was completely open to other approaches.
Rob Hooft suggested that “within each function group, establish a base salary (e.g. comparable with the lowest starting salary in the group), and cut a percentage of what the people earn in that group above the base. An employee with a salary of 55k in a group with a 40k base and a 20% cut would lose 20% of 55-40=15k, that is he will be cut to 52k.”
But I’ve found that complicated actions are frequently misunderstood, so I couldn’t recommend this to Jim. However, Rob also said, “The cutting of the morale must be prevented by positive communication around the process, a real hard job for the CEO.”
Everyone agreed that this was critical to whatever solution was finally adopted.
Rick pointed out that “…the CEO that her pay needs to be cut more (in amount, not necessarily percent) than anyone else’s, and the amount of the cut needs to be leaked. Or, she could simply announce her own cut without any hoopla.”
Phil Gerbyshak suggested that when she makes her statement she should “mention that this cut was done in place of massive layoffs or in place of selling the company, something nobody wants.”
More was said, but you need to read the post.
My own suggestions parallel most of the comments, but while I agree that the CEO cut needs to be the largest, the percentage can’t be smaller than her employee percentages or it will look like a scam.
Additionally, I think all the execs needed to feel the pain and exempting so-called stars could destroy the rest of the organization’s moral.
The CEO might also use a series of Town Hall meetings to solicit ideas and input from employees at all levels on ways to cut expenses.
Sunday Jim and I discussed the suggestions so far; he is excited and is planning to show the thread to his CEO.
He’s hoping that over the next few days more ideas will come in to fuel a discussion with the rest of the executive team this week.
I’ll post updates as the come in and share the results when a plan is decided.
Image credit: svilen001 on sxc.hu
