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Dear All,

Pls find below a nice article on pay cut due to recession.

Feel free for your comments on pay cut.


Shamanth Raj

Dealing with the salary cut

At a time when most organisations are battling it out with the economic slump, announcing salary cuts has become quite a common phenomenon. Here’s a look at how employees can deal with salary cuts

Picture this – you come to office on a usual day and get to know that your employer has decided on implementing salary cuts. Panic not, as this is quite a common scene in offices these days and experts say that you can sail through it.

Most people argue that salary cuts are still better than being laid-off, but the fact also remains that it has its repercussions too. Experts say that no organisation wants to take such a decision unless it is absolutely unavoidable. “Pay reduction during times of recession is demoralising for employees and is the last step a company would ever take, after it has exhausted other cost-cutting measures,” expresses Atit Bhatia, VP - business development, Rexam HTW Beverage Can (India) Ltd.

Sanmitra Trivedi, head-HR, Verizon Data Services India (VDSI) concurs, “Clearly, pay reduction can be traumatic for employees as well as their families and any large-scale collective frustration will freeze the economy further.”

But whatever the reason, the impact of a salary cut is certainly big on employees who suddenly have to change and adjust, according to these financial changes. Some experts also say that apart from reduced income, it also depreciates the market value of an employee. However, it is important to deal with it in a proper manner to ensure that it does not impact your productivity and career growth.

However, Anil Kumar Kathuria, manager, HRM Administration, IOL Chemicals and Pharmaceuticals Limited states, “A pay cut during recession might not have such an adverse effect on one’s career growth and future prospects as a pay cut in economic boom time. The reason is simple; it is happening to a lot of people around the globe and not just one employee because of his/her below-par performance.”

So if you are already hit by this calamity or fear that it is coming to you soon, there are certain ways that will help you sail through these troubled waters.

Trivedi feels that anxiety due to pay cuts can be controlled by sharing other stories of companies who have laid off employees without even considering salary cuts as an option. “We need to make them understand that when the company could afford high salaries and hefty bonuses, they were paid accordingly and now that the company is in trouble, it is imperative to ride the storm together,” he asserts.

Hence, it is essential that you make sure you handle such situations carefully and also help your organisation sail through the crisis smoothly. You’ll be a clear winner once things retain normaly.

Source: Times Of India

From India, Bangalore
Recession time. Business is not doing well. Sales have gone down. Revenue is not generating. So, let's cut cost... or more clearly, let's cut pay. The easiest option available to companies nowadays. Everyone's doing it, that's not the question. The question is HOW they are doing it?
Employees are human being. They will understand if only you try and make them understand. Cut the pay only once you have explianed them your reasons of doing so. Let them know that in these difficult times, Company expects them to come forward and sail it through. 9 out of 10 times they will come forward.
If you do not explain them, they are bound to feel demoralised and demotivated and that is surely further going to affect the business badly.
If the companies want their employees to be part of their pain, they first have to make their employees FEEL that they are a part of them.
That's my take.

From India, Delhi
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