@brianluce

You just don't get the point. No one is demoralized. As people are smart and understand the company goals and situation.

Another thing, suppose you have 30 years as a worker at HP, would you be happy that you have to make the same sacrific the 6 month rookie has to make?

I suggest you to read this book , as it has the answer to this question :-)

@Vitaliy Why would anyone think Steve Wozniak is even remotely qualified to make such a call? He's an engineer. This is a question for psychologists, not computer nerds.

Maybe he's right, I don't know, but saying Steve Wozniak said it so it must be true isn't convincing.

I can think of a lot of reasons a 10% across the board pay cut might be demoralizing. For example, it's regressive.

I think it's absolutely possible that people working for the same company can feel something like solidarity during bad times and that they eventually might even want that 6 month rookie to keep his/her job and to help the company get through tough times - even if it means 10% less money

EDIT: as long as the company can assure to it's employees that it tries every other way of saving money as well

Paying 10% less to everyone is not just demoralizing but also a no-way route. If you rather let go 10% of people, they can search for different jobs & produce something. This way they would just doing the same, but for less - not really a progress. On the other hand, the remaining 90% will be happy that they still have their job & will increase their productivity because they dont want to be the next one leaving. Company have increased productivity & those who left can do somthing else. Just my 2 cents...

It looks like it is time to close topic. As most peoples hands are travelling miles ahead of their thoughts.

If you rather let go 10% of people, they can search for different jobs & produce something.

Hmm. I suggest you to look at the second tag of this topic.

During this time—the early 1970s—the recession was going on and everyone was losing their jobs.

Trust me, in every company there are people without whom it could run. This way that 90% of people are actually paying for that remaining 10% which would otherwise leave. But this is not the point here. Even if there is no job, people can start to do something - even plant potatoes in the backyard & sell them. Not ideal, true, but keeping doing the same for less is not the right route in my view. Imagine the extreme - company needs to reduce 90% to keep all the jobs. Would they be happy to work for 10%?

@Alfi666

You didn't looked at the tag. It looks like you neved had been in this 10%, and you never had been in the situation you describe.

people can start to do something - even plant potatoes in the backyard & sell them.

I did almost exactly this many years ago :-) And can assure you, next time I'll get big shotgun and will find such "smart" manager and his family instead. I learned something.

It's more an attack on Wozniak

Yep. This is why I called it personal. If you look at background and facts, credibility of Woznyak is about 1e25 times more than yours in this question.

in his case there seems to be zero correlation between IQ and income potential.

The thing is that "income potential" is fuckingly bad concept. Last time I checked, none of rich dead motherfuckers could get their income with them.

He's punished more severely.

As I wrote previously, he must be glad that he is still alive. Not to cry about his 10% that will force him to buy slightly smaller yaht.

From what I know of Wozniak he was a talented engineer that teamed with Steve J, got rich fast and has been effectively retired since age 30. That's not an impressive resume for a would be social psychologist. And this has nothing to do with me, since I already said you and Wozniak might be right. It's a devil's choice. I just don't think saying something is true because it was said by Wozniak is convincing -- when it's clearly a topic not in Wozniak's wheelhouse. Now, when Wozniak talks about product development that's another story.

I'm noy saying that firing 10% of people is good, but imho certainly better than flat payment reduction.

We already got your englightened opinion. Thanks for repeating it.

I guess this is more of a socialism/capitalism question :)

Hmm. Does it mean something like "Fuck all this workers, let them grow popatoes, we are for true capitalism?" In this case, I am sure that current politicians have few surprises for you, as they clearly plan to "fuck all this pension and social funds, let all old fucks grow popatoes till death, we are for true capitalism".

This thing is not capitalism in general. This is called monetary liberalism. In the more common terms, placing wagon (monetery system, banks, insurers) before horse (people and production firms).

Let me explain to everyone how it's really done here in America. First thing is fire 10% of the workforce. Then a few days later give the remaining employees 10% pay cuts. There. Everyone happy now?