STRATEGY

Ironically, it's easier to cut pay across an entire department or company than it is to cut a single person's pay. That's because spreading the pain makes it clear this is an economic measure. No matter how fervent your denials, a person singled out for a pay cut will see it as an attack on their personal value. Your goal in a department‐wide cut is to mitigate damage to morale and get the team to focus on the job‐saving nature of the cuts. Department or company‐wide reductions should be presented in a group meeting. Bringing in an entire department and announcing a comprehensive cut can have the ironic effect of increasing team togetherness: they are all sacrificing for each other. It also prevents the backstabbing that could result from a series of one‐on‐one meetings in which employees might offer up one of their coworkers as a sacrificial lamb. Cuts should be announced as soon as possible after the decision has been reached so the news doesn't leak. Schedule the meeting for a Friday afternoon to avoid a week's worth of sulking. Cuts should take effect immediately to signal the urgency of the effort and to make it clear there's no flexibility. Explain that the situation will be reviewed in six months to see if the cuts can be restored. Be completely truthful about the extent of the cuts because the news will leak out eventually. If cuts are company‐wide, say so. If they are limited to specific departments, explain why.

TACTICS

• Attitude: You're doing what needs to be done to preserve everyone's jobs. It's an obstacle you can overcome by remaining unified.

  

• Preparation: Get all details about the extent of the cuts and be completely transparent. The facts will come out anyway.
• Timing: Schedule the meeting for a Friday afternoon to avoid a week's worth of sulking.
• Behavior: This should be a group meeting, held in your office if there's sufficient space. If not, reserve a conference room.

ADAPTATIONS

This script can be modified to:

• Announce a reduction in the resources available to any group or team.

KEY POINTS

• Your goal is to mitigate damage to morale and get the team to focus on the job‐saving nature of the cuts.
• Present this in a group meeting.
• Announce the cuts right after the decision has been reached so the news doesn't leak.
• Be completely truthful about the extent of the cuts.