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They cut my salary by 30 percent, then went and brought in someone who earns twice as much as me - Walla! Business

2020-08-12T21:07:40.344Z


Because of the Corona crisis, wages have been cut for many workers, who to their amazement have seen the company recruit other workers at higher wages. Industry sources explain why this is happening and what the consequences are


  • Business
  • Career and higher education

They cut me 30 percent of the salary, then went and brought in someone who earns twice as much as me

Due to the Corona crisis, workers in all fields, from high-tech to football players, understood the need to cut their salaries, but when the organization brought in new talents who earn more, they felt hurt. What is the logic behind the recruitments and how can they be carried out without damaging the trust between the employees and the management?

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  • Hi-Tech
  • membership
  • Management

David Rosenthal

Thursday, 13 August 2020, 00:02

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      "What happened, suddenly there is money?"

      This situation is familiar in many organizations from all shades of the business spectrum, especially in recent months. The CEO announces changes, cuts and worsening conditions. Employees understand the magnitude of the hour and humbly accept the reality imposed on them. Those who have left have left, those who remain do so at a salary tens of percent lower than they are used to receiving. From a single appointment to an entire department.

      The workers start whispering to each other. Their math is simple: at a time when the company's revenues have fallen and as a result their financial security has also deteriorated, the trend in the organization should be one-way - there is no entry for newcomers. It is not pleasant to suddenly see a person coming and manning the chair of a dismissed colleague, which in the eyes of the employees indicates opacity and insensitivity on the part of the company's management. This is also what leads to the cynical question we posed at the opening of the article, a question that is often heard in the corridors, offices and, yes, also in the training complexes of football teams. In this area the team players have suffered a tens of percent cut, but have seen the owners acquire players and add them to the squad.

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      How do you tell an employee who has just suffered an economic blow to new recruits?

      "Employees' sense of resentment is completely understandable," says Dr. Edna Rabbeinu, an expert in organizational behavior and human resources at the Netanya Academy. "Between employer and employee, apart from a formal employment contract, there is also an informal psychological contract, expectations of the parties. , His knowledge, time and energy, to be involved in the work and to function well. On the other hand, the organization will provide him with opportunities for development, learning, fair wages and working conditions. A mismatch in expectations and a sense of reciprocity (the employee feels he has fulfilled his part of the deal while the organization does not) creates frustration and disappointment. "

      Accountant Ahmad Iyad, a lecturer in the economics department at Sapir Academic College To Marmor, especially if the deep pay cut is for non-managerial employees and no cut or break in dividend payments to shareholders has been made at the same time. A profound reduction in wages of 30% or more is a serious blow to the worker, and today many families in the country, even in the middle class, are facing a heavy cost of living. "

      What, in fact, is the logic in the course? After all, if only now has the company announced a downsizing trend, why is it so important for it to suddenly re-recruit, when the chair of the employees who have left has not had time to cool down, and contribute to the feeling of anger among existing employees?

      "In recent months, we have witnessed a significant trend of renewal in high-tech companies," notes Ronit Kroll, occupational organizational psychologist and CEO of Krull Consulting. Across competitors. "Recruitment of technological talents to produce a competitive advantage by rapidly developing innovative products, as well as a trend of focusing on recruiting local sales managers abroad, in order to gain an advantage over competitors who employ Israeli salesmen who can not travel to close deals."

      "A period of economic uncertainty creates many challenges for organizations," explains Dr. Ronit Nadiv, Head of the Human Resource Management Department, Sapir Academic College. "On the one hand, the organization is required to adapt to the economic reality and usually cut costs, and on the other, sometimes Unique investment opportunities open up that require additional investment. For example, if an organization is interested in recruiting 'stars', this is a good opportunity to try to locate the relevant people because they may now be more open to outside suggestions. Similarly, the organization has challenges in the areas of learning: in an economic crisis, they usually try to reduce training and learning costs, but this is exactly the situation that requires more investment and development of employees in order to get out of it. "

      Familiar with the phenomenon from both the business world and the football world. Itai Ben Zeev, CEO of the TASE, appointed chairman of Hapoel Beer Sheva and faced massive cuts (Photo: Danny Maron)

      "The organization has a stock of roles that must be filled and needs knowledge, skills, abilities, personality and other characteristics relevant to the job in order to perform them successfully," says Dr. Rabbeinu. "The existing employees in the organizational pool do not necessarily have the characteristics required for success in a specific job. In other words, even if there is a quantity of employees, they do not necessarily have the necessary quality and therefore sometimes the talents have to be brought in from outside. For example, recruiting an employee with unique knowledge that is lacking in the organization. Outsiders bring with them renewal, are not bound by the existing conduct or culture and can lead and encourage organizational improvement. "

      And yet, all this must be done with due caution, because the road to maneuvering in a situation is riddled with bumps and obstacles." "It is not possible to get out of the organization at this time," explains Dr. Rabbeinu. Current employees do not see them as potential so they may look for another place to believe in. Organizations know that now the market is for job seekers (demand exceeds supply) in some occupations and therefore there is less fear of leaving. Moreover, some take the opportunity to say goodbye to less expensive or less functioning "It is good to replace them with employees who will do the same job, perhaps even better and at a cheaper rate due to the market situation. In general, crises and shocks in the labor market allow for organizational changes more easily."

      So how do you do it right anyway? How an employee can accept the fact that his salary has been cut, his friends fired and here, they bring in talent from outside and pay him more money

      "There is a need for a good ability to manage paradoxes," says Dr. Nadiv, "reduce and invest at the same time, lay off unsuitable employees. But at the same time absorbing new ones, maintaining an organizational culture and at the same time producing innovation and new directions.

      "" The first to stand up to the feeling of frustration are the direct managers, who need to have an empathic conversation that includes an explanation of the move and how it fits into the vision. Transparency must be created, "says Dr. Rabbeinu." The feeling of resentment does not always reach the CEOs. It depends on how much the media is bottom-up, there are also a lot of dividers in the middle. The higher the organizational hierarchy, the more political and there is less trust in the system, the less likely it is that disappointment will come to the fore and even if it does, it is not clear to what extent. Managers are required to withstand the onslaught of risk from the remaining employees to work - to see how bubbling the space is and to make sure the new procurement fits well into the team. "

      Iyad also agrees that transparency is the name of the game:" It is important to provide explanations to employees. , And no less important - with the end of the crisis. Government assistance programs can alleviate the harm to workers and organizations. "

      Carol does not think the obstacle lies in the CEOs' approach, but in dealing with the requested salary: "From conversations with HR managers and CEOs I got the impression that there is a high awareness and sensitivity, to prevent a sense of unfairness or resentment among existing employees," she says. It is around the high wage demands of the talents. They, for their part, do not compromise on their demands and some even make the move due to wage reductions in the companies in which they are employed, but on the other hand there is a reluctance to create wage gaps among existing workers. "There is a high sensitivity to the issue of wages through personal and discreet employment contracts. The conditions are based on the candidates' experience and professional background, and above all the highest importance is for communication and participation of managers and employees in recruitment goals, while creating a balance between existing and new recruits."

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        Source: walla

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