Lesikar's Business Communication: Connecting in a Digital World 13th Edition by Kathryn Rentz,Paula Lentz

Exercise 21

You are the owner of a small company called Marvel Technology Solutions. The company has been in business for eight years and has done well financially. In addition, you believe that your company enjoys one of the most positive working environments in the industry. Your employees get along very well with one another, work well as a team, and express their genuine appreciation for how you run your company.
Despite your company's history of success, this last year has been very difficult. The downturn in the economy has made it tough for many small businesses, and Marvel is no exception. It has been a struggle the last few months just to meet payroll, which has had a noticeable effect on the workplace environment, as many of your employees wonder if they will be laid off. You have pondered the possibility of laying employees off, but every time this thought crosses your mind, you quickly dismiss it. Your 14 employees are all outstanding, hardworking, and loyal. You would feel terrible if you had to lay any of them off. However, your financial situation necessitates that you do something.
After much thought, you have decided that the best way to improve the financial situation would be to have everyone-including yourself-take a temporary 15 percent pay cut. Obviously, this will not be a very popular move, as some of your co-workers have spouses who have recently lost their jobs at other companies, so any reduction in salary will make it hard for these families to pay their bills. However, it is better to have a job at reduced pay than no job at all.
Write a memo to your employees announcing and explaining your decision to have everyone take a temporary pay cut. Mention that industry experts predict that the economy will improve in 8 to 10 months-which, if true, will put an end to the need for the pay cut. You may also wish to emphasize the historically positive work environment at your company and appeal to your employees' sense of camaraderie and loyalty.