Would you take a pay cut to save a coworker's job?

by Lucinda Gunnin

Created on: July 03, 2009   Last Updated: July 04, 2009

Deciding if one would accept a pay cut to save a co-worker's job is more than a matter of personal finances, greed and ethics, it is also a matter of trust.

In May, the company my mother has worked at for almost 20 years asked employees to take an across the board ten percent pay cut in order to avoid layoffs. For my mom, that pay cut wiped out every raise she had received for about three years and yet when the company president presented it to the employees as an option, it was met with almost unanimous acceptance.

Why?

Because the employees trusted the company.

The president explained very explicitly the financial situation the company was in. While it wasn't losing money hand over fist like some were, orders had dropped by more than 50 percent. So, there were a few options the company could take. It could go to a four day work week effectively cutting all non-salaried employees by 20 percent. They could have layoffs for the first time in company history, an option that management sorely wanted to avoid, or they could have everyone accept a 10 percent pay cut with a promise that when orders returned to a preset level and remainder there for one month salaries would be reinstated to their previous levels.

No one was exempt from the cuts. The president and the highest levels of management took them along with everyone else and employees were told exactly what conditions needed to be met to get their pay reinstated. All of those things made accepting the cut a little easier.

That's not to say it was easy for any of the employees. Many who had been living pay check to pay check and barely making ends meet had to make drastic cuts in their own budgets. My mother cut her home Internet service and made other budgeting sacrifices to be able to live with the pay cut. It hurt. But it hurt less than seeing employees and friends be left completely without a job.

But most importantly, the employees trusted the president. The company is a family managed firm and has never resorted to layoffs. The company's overall financial health was good prior to the recession and the company had earned the employees trust.

So, would I take a pay cut to save a co-worker's job? Based on the lessons I've learned from my mother, I would if I trusted that my employer was fiscally responsible and that my pay cut would make a difference. Ethically, it seems like the right thing to do, to be my brother's keeper, and if the company has been good to me and earned my trust, they deserve my faith as well.

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