Are pay freezes counterproductive to attracting talent?

By Scot Herrick | Cube Rules Commentary

Feb 19

Well, the thinking at the top of big companies (Boeing’s CEO) looks like this:

“More than a few of you have written to me asking whether we could avoid layoffs altogether by not paying incentive awards this year or by freezing wages across the board,” McNerney noted.

He said such actions would preserve some cash during the year and lessen the immediate impact on people, but “our judgment (and one shared by most major companies) is that they would put us at a competitive disadvantage.”

Since Jan. 1 Boeing has announced plans to lay off about 10,000 employees, mostly in overhead and military-related positions but few in the commercial airplane production and engineering jobs.

Boeing consistently lays people off virtually every year in some area of the company.

As an employee, would you rather take a pay freeze and/or forego a bonus and keep your job? Or would you rather risk the layoff?

Do you think if a company imposes pay freezes and pays out bonuses based on the economy in tough times that your talented self wouldn’t consider working there?

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About the Author

Scot Herrick is the author of “I’ve Landed My Dream Job–Now What???” and owner of Cube Rules, LLC. Scot has a long history of management and individual contribution in multiple Fortune 100 corporations.