Analyzing My Pay Cut

I had planned to turn in and get some shut eye, after a night of hearing my daughter wail her brains out due to a fever. But I just remembered that I picked up my paystub today, and tomorrow will be the first payday where in my whole career of working, I have taken a paycut. Now, I'll set some context here - I am not the only one who took a paycut. In fact, all 300,000+ employees in my company took a pay cut. So while I realize I am not alone, it still stinks nonetheless.

In thinking about this further, I am angry at having to take this paycut. I had no choice. But consider this. In the 12+ years I have worked with this company, I have exceeded my job goals and performance goals every year. In fact, for many years on end, I was in the top 5% of performers in my company. Of course, I got the corresponding raises that went with that, and enjoyed getting raises every year, until last year. I was then told that as a means of savings, they started to bell curve the performance of the team. Only x-percentage of people (and it was very low percentage) can be in the top 15 percentile performers. I was ranked there, but my manager was forced to move me into the standard ranking (which 70% of people in the company get, and despite the statements of my manager that my ranking was still good, I said to her, "whatever, you don't have to sell me this." I was told to my face that I should have been ranked higher. I know I should have, and both my performance and peer reviews would indicate such, not to mention my historic pattern of excellence in my performance. I track all my contributions, goal timeframes, performance expectations and have a huge spreadsheet every year which I send to my manager to buttress and demonstrate that he/she did not go wrong in ranking me as highly as they did. Guess that doesn't matter anymore.

So you can imagine my irritation at being told that we are all being forced to take a pay cut due to the economic climate. Well, my paycut essentially erased two years worth of raises that I worked hard to earn. Further, the paycut is not reversible at a later date. There is no justification aside from, "well, it was this or let people go." At first, I accepted that explanation, but the more I thought of it, it goes against everything I know is right about earning one's pay. And shockingly, it has made me evaluate the role of unions, something I have always been against.

I can't see legally how they can cut my pay. If it was sucky performance, then fine, it's justified. But it's not - it's just a cost savings measure, though it has been apparent to me that it also is used by company brass to line their pockets with bonuses. They should not be allowed to arbitrarily cut my pay like this. It has effects on any future severance package and pension. In some jurisdictions around the world, the company had to ask people to accept a pay cut. So far the overwhelming answer for people who have been tried to be sold this, is a resounding "no". Why is it that their pay structure is protected, but ours in North America is not?

Now, I can understand if a pay cut works like this - we don't pay you for x amount of days, so take x amount of days off. It's almost equivalent to asking you to stay home without pay. That, I suppose is a bit more palatable. But the way this pay cut is structured, we are still required to put in our normal hours, and our executives are telling us that we need to focus on the job more than ever. Well, perhaps I am missing something, but this is a huge morale blow to employees. How can you expect them to exceed, if not simply just maintain current service levels to the customer if they are essentially devaluing the services of the same employee by pay cuts. But legally, how are they able to do this? Conversely, what is to prevent me from deciding to work with a commensurate percentage less effort, in relation to the percentage of my pay cut? Now, I would not do that, since I have a bit more personal integrity than that, but this is what's happening around the company, with people showing up whenever the please, hoping that they may simply get let go so they don't have to deal with this. Remember, these are not lazy people here - these are not troublemakers - those were canned by the tens of thousands already via layoffs and cutbacks. These remaining folks are hard working individuals who have poured their daily energy in putting their best foot forward. It has made it tremendous difficult to maintain the same fervour.

Now, in times like this I try to remind others (and myself) that it can always be worse. My sister lost her well-paying job a few months back, instead of accepting a whopping 35% pay cut. Some people who have left frustrated have not found other jobs. And unlike many in my position, I still actually enjoy my job to a degree and really enjoy working with the people with whom I have been privileged to be colleagues. My job offers much flexibility for my family schedule and it is rather low stress at this point. So I can easily look at my pay cut and say that yeah, it sucks, but it can be worse, and I just need to find the fringe benefits of the job that may not be monetary. It's true not everyone would be in a similar situation - some people have rotten bosses, rotten colleagues, are overworked and are then forced to take a pay cut - thankfully, I'm not in that bad of a situation, so I have to remain thankful that I have a job.

But it does make me think about the value of unions, in particular how they would protect stuff like this from happening, at least without agreeing to it on behalf of the workers. Unlike 20, 30, 40 years ago, where hard work was almost always guaranteed with a raise and / or a promotion, nowadays, it's hard to send the same message to kids that if you work hard, you'll do well. Oftentimes nowadays, companies will not care about how you perform as an employee and would not structure the pay to work like that (even though many of these companies have so-called pay for performance type of systems - at least by name only). I have a real challenging time telling my son straight faced that hard work pays off. I really can't say that for sure, since I'm not sure if I still believe that, as much as I would like to. Publicly traded companies are so concerned about their stock price that they would forego proper employee compensation treatment in order to save a couple of bucks. I think that overall, however, this will really come back to bit many companies in the butt, in the long term.