Blog entry by Akinyemi Sowunmi
Pay cuts rather than layoffs is perceived to be better because:
1. The organization gets to keep staff members they have labored and expended lots of capital to employ.
2. It is perceived to build loyalty
3. It portrays some level of selflessness and fosters the community spirit among staff members.
However, the success of this approach to managing the COVID-19 crisis depends on the ability of the company to sustain it.
I can’t help but wonder which would be better: To keep all the staff members until the ship sinks and all lose their jobs, or to cut off excess and stay afloat.
The community benefits when unemployment is low; however, we must evaluate carefully to confirm that the business will ultimately survive or we all lose.
The key word here therefore is sustainability.