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In a downturn do you cut pay, slash the workforce or protect precious talent?

Patricia K. Zingheim (Patricia K. Zingheim is a partner in Schuster‐Zingheim and Associates, Inc., a firm located in Los Angeles that consults with companies throughout the world on the development of total rewards, incentives, and other pay solutions. He is joint author of Pay People Right! Breakthrough Reward Strategies to Create Great Companies (Jossey‐Bass, 2000).)
Jay R. Schuster (Jay R. Schuster is a partner in Schuster‐Zingheim and Associates, Inc., a firm located in Los Angeles that consults with companies throughout the world on the development of total rewards, incentives, and other pay solutions. He is joint author of Pay People Right! Breakthrough Reward Strategies to Create Great Companies (Jossey‐Bass, 2000).)

Strategy & Leadership

ISSN: 1087-8572

Article publication date: 1 February 2002

1423

Abstract

Little research has explored how best to reduce labor costs when the economy turns down. A recent phone survey of CEOs and senior executives at 20 “Fortune 100” companies suggests that CEOs are now concerned and confused about how best to shrink their workforce. It also indicates that they would rather use layoffs than pay cuts to reduce labor cost. But these senior executives realize they cannot “shrink to greatness.” Eventually these successful companies must again begin to add staff. So planning strategically now for both the growth and shrinkage of the workforce is essential to providing a high‐performance workforce and workplace.

Keywords

Citation

Zingheim, P.K. and Schuster, J.R. (2002), "In a downturn do you cut pay, slash the workforce or protect precious talent?", Strategy & Leadership, Vol. 30 No. 1, pp. 23-26. https://doi.org/10.1108/10878570210414417

Publisher

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MCB UP Ltd

Copyright © 2002, MCB UP Limited

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