MBAA
MBAA 604 - International Business Administration - Case Study 4 - Cut Salaries or Cut Jobs

MBAA 604 - International Business Administration - Case Study 4 - Cut Salaries or Cut Jobs

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MBAA 604 February 28, 2016 Case Study 4: Cut Salaries or Cut Jobs? 1. What are the benefits of across-the-board cuts? To save money in financially difficult times, companies may choose to keep as much of their workforce while reducing salaries or hourly pay. This can be a wise way to retain highly trained employees and their cumulative experience through the duration of their financial duress. For a company in which there is a large difference in pay between the highest and lowest paid workers, a pay cut for management may create a stronger sense of community and dedication to pulling through together. In terms of community, across-the-board cuts also reduce the chance of steep decreases in employee morale and commitment that are common with layoffs. In fact, layoffs can increase burnout as well as rates of stress-related illnesses in remaining employees. (Ramlall) Across-the-board cuts, however, seem to work best in situations and cultures where sacrifice of the individual for the sake of the whole is not only valued, but also expected. (Peng)
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  • Fall '14
  • Case Study, layoffs, mass layoffs

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