Pay cutsPay cuts are not popular:.

Pay cutsPay cuts are not popular:. The common thinking is that pay cuts destroy morale and encourage top performers to go elsewhere. Employers can cut bonuses, eliminate raises, and even slash benefits, but base pay cuts have generally been viewed as sacrosanct and out the question.Pay cuts, nevertheless, are a viable option during economic downturns. Some companies have learned that their employees would rather take reductions in base pay than to see some of their colleagues laid off. Highly cohesive companies where employees feel connected to each other are especially prone to recommend pay cuts as a strategy for saving jobs. A survey of 518 companies during the economic downturn of 2009 revealed that pay cuts(sometimes combined with reduced hours)were part of the pay reduction strategies in 37 percent of these companies. While some companies used uniform pay cuts across the board, others made larger cuts in the salaries of their executives.