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a tale of salary cuts, new hires, and talent departing

June 19, 2009

in talent

nestling teaspoonsan early lesson in my career was that everything communicates. that lesson rang loud and true last night as i listened to a good friend tell me she’d just learned that she, plus all partners and the founder, was taking a required double-digit pay cut. folks, she’s in a nonprofit job so you know that hits hard. the economy is slow, business is down, and she, while not a partner, is one of the highest-paid members of the team.

three things bothered her about the cut:

  • it followed a significant lack of marketing and business development, actions that could have helped them better withstand a market downturn
  • just last week, three college grads arrived on the scene — new hires who could have been offered staggered start dates or a portion of their salary to retain, but not activate them
  • the founder didn’t take a larger cut than the rest, despite his larger stake and greater influence on these decisions.

for my friend, these actions shook her confidence in the leadership. she witnessed thinking in a vacuum in lieu of long-term strategic planning. and she personally felt the brunt of knee-jerk decisions at odds with one another. now this very talented contributor is planning to walk.

she’s not alone. a recent workplace survey shows that 54% of workers plan to flee as soon as the economy recovers. furloughs being used to avoid job cuts are creating employees who are overworked, angry, and feeling exploited. these reactions are amplified when leadership avoids making the tough decisions earlier, leaving employees to shoulder the pain today, as in my friend’s case.

how leaders lead, how decisions are made, how we work. everything communicates. more than the actual communications — the print, web, email, or in-person way you communicated your message.

[image: atomicshed]

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{ 3 comments… read them below or add one }

autom June 19, 2009 at 2:49 pm

it’s harrowing to admit that i’ve seen these types of scenarios time and again. this brings to light some deeply rooted inefficiencies in organizations bogged down either by intense political pressure or sheer lack of accountability and insight.

you called it well. and if one could chalk this up to poor thought leadership, i’d say (as i tweeted once before): so many thought leaders, so little thought.

thanks for sharing – a

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David Janus June 19, 2009 at 2:55 pm

Nice post.

Sounds like an “actions speak louder than words” sort of situation. I’m guessing that the pay cuts were announced with a we’re-all-taking-one-for-the-team kind of spin which, from your description, would have been disingenuous.

So maybe another takeaway from the story is not only that everything communicates but that, in the end, you can try to communicate all you want, but it’s your actions that will be noted and remembered.

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fran June 19, 2009 at 7:46 pm

thanks for your comments. and yes, what you do communicates so much more than what you write.

both of you might be interested in a harvard post on furloughs “torpedoing” employee dedication, also published this week: http://bit.ly/1AJPQ

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