Register now or log in to join your professional community.
If I'm facing financial problems with my company and I have to either:
1. Relieve3 employees of their services
2. Reduce everyones' salaries by%
What would be the correct choice? Would there be a third choice available for me as a decision maker?
I'm always ready to help my juniors for what they needed,Because we are employees
A friendly office atmosphere where plenty of opportunities for personal growth and career development are offered
tough but solvable...i think non of the above...you dont want to lose valuable assits and at the same time you dont want to announce that you have financial probloms among exisitng and effective employees!!,, you should look at other areas of savings in my openion.
Thanks for a good question. It is very difficult to adopt any choice which is depended on a size of the financial problem. In case a simple problem, I think the second choice is more preferable than first one with limited reduction of the employees salaries not more that 10% with cost cut from other business activities statements as : Communication Cost, Office services Cost, Human Resources - administration cost, Transportation cost, Sales Cost, Advertising cost and Stoppage completely any wastage and additional benefits for employees and managers.
I think such procedures will save a lot of amounts more than cost reduction generated from Services termination of three employees.
You should have a personal meeting with each individual without leaving any clue they will open up most probably will agree with reduction of salary at this juncture and be very sure that their morale remains the same.Take them for a lunch and motivate them.
It's very difficult. You are in a tough situation and you have my sympathy.
Firstly, whatever you do, make sure you follow the relevant employment laws.
Secondly, whatever you do, do it all at once. Most businesses in this situation cut a little, then a little more, then a little more. I once worked in a place where we had an endless stream of redundancies. Every Monday morning I came in and somebody wasn't there any more. Cut more than you think you need.
Thirdly, make sure you keep your key employees. When things get bad, it is the good people who leave. Try to prevent this from happening.
Good luck.
Hi,
If you are planning for cost reduction, you need to compile the business expense statements, analyse the operating expenses like
1. marketing and advertisement expenses
2. Telecommunication expenses
3. Office machine hire expenses
4. Merchant services
5. HR Admin costs
6. Wastage & Recycled
7. Freight Cost and so on
You can manage to cost cut expenses in various levels.
Decreasing the % of salary of an employee will not give you better organization climate. You can temporarily stop the additional benefits provided to the employees.
Or you can go for reduction of manpower.
Thanks / Praveen
