What’s that mean?  When times get tough, evaluate employees individually.  Sure, global pay cuts are an easy out, but it’s going to be tough for Dan from accounting to accept a global cut when Mary from sales spends most of her day on the phone chatting with her wedding planners.  If you have too many regional managers or under-performing sales people, you owe it to the rest of the team to downsize.  Dan shouldn’t be punished for Mary’s shortcomings.  Furthermore, failure to hold under-performing employees accountable will hold your over-performing employees back.

Why is that?  Well, without carrots to reach for, what’s the point of hard work?  If Dan works 60-hour weeks and has lowered accounting costs, then he should be rewarded.  If he realizes that he will not be rewarded for any increased effort, then he will apply his efforts elsewhere — like job hunting.  Nobody wants to stagnate in a role.  Good employees need to feel like they’re growing, like their roles are expanding.

Gawker is a great example.  As soon as the economic outlook became clear, they downsized, (in theory) ridding themselves of the under-performing and solidifying their base.  Then, last week, they leaked their new bonus program.  Their actions are perfectly transparent (hell, they blogged about them): when times are tough you may be fired, when things go well you’ll earn more money.  Meritocracy!

But maybe I’m wrong.  Are there unhappy people working at Gawker?