Salary Reduction Must Be Based On The Definition Of Salary.

Employers and employees are two parties to buy and sell.

From a certain point of view, employees are the sellers, and the company is a group of skills to purchase employees.

This group includes two parts: intangible and tangible, intangible aspects include company reputation, career planning and the environment that can be applied, while the visible part is salary and bonus.

But from another point of view, employees can also be buyers, buying the above value and selling their own ability.

However, from any point of view, salary represents the value of this job or ability in the market.

This is a paction based on the concept of market supply and demand.

But the price of this paction is not fixed, and will vary with the environment, such as demand and prosperity.

The United States has a more "standard talent" website. Everyone will put their own expertise, learning experience and other background information on the website, provide employers with competitive needs, and finally decide on their choice according to the conditions provided by the employer.

Furthermore, when hiring employees, the company must not only buy the employees' existing capabilities, but also bear the incidental opportunity cost.

These opportunity costs include the stability of employees.

(payment of pension) and so on.

The longer the seniority, the higher the value. In terms of age, most people will presuppose that salaries should increase with age.

However, for a company, seniority does not have any meaning if the professional competence of employees can not continue to grow.

The contribution of an employee in the company can be basically divided into two quadrants, namely professional value and structural value.

Structural value refers to whether employees are familiar with the company's environment and operation routinely and whether they have established their connections.

The so-called professional value is personal professionalism.

Generally speaking, structural values do not take too long to build, and there are limits.

However, professional value can be continuously accumulated.

If the professional value can not be improved, only the structural value can be contributed by seniority, so seniority is not very helpful to the market value of individuals.

In addition, knowledge is life cycle, so if the worker does not continue to learn, and continue to enhance their professional value, when the original knowledge life curve goes down, the personal market value will also decline.

To extend the above concept, the enterprise provides a set of values including salary, but it must be noted that this group of values is based on the trust between employers and employees.

Employee loyalty is because he believes that the company will not betray him.

When trust is destroyed, the intangible part of value will also be seriously affected, leaving only tangible money.

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On the same ship, many bosses are thinking about what the conditions of trust are. In fact, the reason is simple: let all employees feel that they are sitting on the same ship with their boss.

No matter what danger is encountered, the boss will not give up on me, and will think for me at the same time.

On the contrary, if the employee feels that he may be sacrificed, trust is destroyed, so long as he has the ability, he will choose to jump to other safe places.

HP suffered a business crisis in the early 1980s, when HP gave up layoffs and chose to cut the salary to tide over the difficulties. Meanwhile, the more senior executives, the bigger the pay cut.

The reason why the leaders of HP adopt a larger salary cut for senior executives is that he thinks that everyone has fixed expenses, and the basic salary is not much. If the pay reduction is too large, his livelihood will soon be faced with problems, and the salary of the senior executive usually exceeds that of the living needs, so the larger salary cut will not jeopardize the basic survival.