Abstract
When a company meets financial problems, it faces a difficult choice of how to save reputation and profits. Sometimes organizations` leaderships consider that the problem of such a crisis is the abundance of employees, so they take the decisions to reduce the number of those, who have to be paid for the work they do. The hirers require the total devotion for work from those, who want to be involves in the working process, so they have to provide employees with all necessary things for them to work well. However, when it comes to a crisis, employers decide to solve it as fast as possible for organization to develop and expand. There are some ways of solving financial problems. The most used of them are the ways to reduce the company in force. These methods are: pay cuts or mass layoffs, which, in any case, will affect the employees` lives. These ways to fix the finance situation of a company have both benefits and deficiencies, which cannot be ignored while considering feasible solutions.
Cut Salaries or Cut Jobs
The world economy is in difficult situation, and sometimes employers are put before the choice: to cut salaries or cut jobs. Relying on the decisions they take, the employees` lives and careers are becoming questionable. Some will lose the working place of their dreams, and others will lose only the place, where they get money. But there is no other solution for the company directors of how to keep the organization afloat. Anyway, the problem has to be solved in order for the company to develop into a huge and powerful one. Employers practice different methods to teach their workers to raise the level of efficiency of the work they do, but when it comes to radical changes, they give the employees freedom of choice: to stay in the company and have little payment or to be fired with a good recommendations.
Many company leaders consider reducing salaries of their employees to be the right way to save the organization when it is needed, as those, who were once hired, have to stay devoted to work even if they meet difficulties during their working process. Earlier the employers could cut bonuses or eliminate raises, but they were not able to cut base salaries, it had to be off limits (qtd. in Mcgregor, 2009), but now hirers of even huge and well-developed companies can effort essential payment cuts. Of course, such changes undermine the reputation of a company, but people are afraid to lose their jobs, so they follow the conditions hoping to catch the time of the company`s success. Employers consider the workers to be grateful for doing anything to protect their working places and jobs at all (qtd. in Mcgregor, 2009). They stay devoted because of the fear to be unemployed or misunderstood at their new jobs.
According to Eric Krangel`s article about across-the-board pay cuts, everyone understands that such steps may have some benefits for people with high incomes, who suffer not much – they just do not have to pay more taxes than they used to, they become ordinary citizens with average salaries (2009). Sometimes, employees agree to get little salaries in exchange of increasing of their days off for recovering after such extra changes, but what is better: to survive rapid mass layoffs or suffer from long-lasting reducing salaries? Across-the-board pay cuts may affect their attitude to work itself and it can turn into the rising efficiency and quality of the work made if promising to return stable payment or even raise it a little. More and more hirers nowadays practice it and succeed in keeping their companies afloat – reboot of the organization`s actives improves the working process and the quality of goods. The efforts taken to save some amount of money are considered as a great sacrifice, as employees do not earn so much to support their working place with money. For example, when South Carolina's Charleston Symphony Orchestra needed to slash salaries across the board, every employee took less or even no money for some time for saving $180,000 (qtd. in Mattioli, 2009).
Companies can try to use the method of reduction in force by implementing mass layoffs, which badly affects the companies` reputation. Nevertheless, even such radical decisions taken by employers have some benefits. When a director of a company fires workers massively, he updates his company totally – those, who stayed, intensify all their skills and potential in order not to be fired. With the lightened system of management, the company is able to extend the spheres of handling and focus on new methods to develop business.
Nowadays there are many people, who have to adapt to work in countries they live in after migrating from their native places. The ones known as the most hardworking are Japanese, who work in United States. According to Yamazaki and Kayes, Japanese expatriates bring changes to the place they work in. At first they differ greatly from their coworkers, but later understand their obligation to bring some innovative ideas in the management, and they do it (2007). They develop the methods used at working places along with expanding the areas they specialize in. Japanese are known to be hardworking people, so the only advice for them is to follow their wished to reach the highest peak of career. If working well, they will meet no difficulties during the working process, even if a company they work for is on the edge of bankruptcy. There are always a lot of options, and good professionals will never vanish. Companies that need great specialists will hire such ones with great pleasure.
One can argue about benefits and deficiencies in policies, which are taken by leaderships to save companies when difficult times come, but such policies have to be implemented, as employers and employees should not live middling, when there are ways to improve their lies by means of rebooting workplaces. The possible ways to keep companies afloat are to provide mass layoffs or across-the-board cuts, effects of which are described above. Each director is free of choice to manage his company in a right way, so there are no guidance of finance saving.
References
Krangel, E. (2009, February 19). “HP Implements Across-The-Board Pay Cuts”. Business Insider. Retrieved from http://www.businessinsider.com/hp-implements-across-the-board-pay-cuts-2009-2
Mattioli, D. (2009, April 9). “Salary Cuts: Ugly, But It Could Be Worse”. The Wall Street Journal. Retrieved from http://www.wsj.com/articles/SB123923734453303473
Mcgregor, J. (2009, March 29). “Cutting Salaries Instead of Jobs”. Bloomberg BusinessWeek. Retrieved from http://www.bloomberg.com/news/articles/2009-05-28/cutting-salaries-instead-of-jobs
Yamazaki, Y., Kayes, C. (2007, September 5). “Expatriate learning: exploring how Japanese managers adapt in the United States”. The International Journal of Human Resource Management, 18 (8). Retrieved from EBSCOhost.
