Payroll Cost in Today's Increasingly Book Report

Traditionally, reducing payroll has meant laying off staff. Although this has the intended effect of cutting costs, there are negative effects as well that may counter this strategy. Centralizing certain processes can also result in a need for workers. However, other options may be available to help cut payroll costs, including converting employees to a merit pay system. Whichever option an organization determines is appropriate, careful consideration needs to be applied to the organizational goals and plans and how cuts will affect the strategies in place to achieve these. Certain product lines and strategies could be negatively affected by a reduction in payroll. Additionally, core competencies could be forever damaged. In these instances, the organization may be saving money now, but destroying their earning potential in the future.

References

"Consider converting merit pay raises to other rewards." Financial Executive, 15(3). p. 8.

Core competencies. (2010).Retrieved March 23, 2011, from http://www.quickmba.com/strategy/core-competencies/.

Creative ways to cut payroll costs -- without layoffs! (13 Mar 2009). Retrieved March 23, 2001, from http://community.peachtree.com/t5/Small-Business-Success/Creative-Ways-to-Cut-Payroll-Costs-Without-Layoffs/ba-p/6238.

Laying off employees: expert solutions to everyday challenges.. (2009). Boston, Mass.: Harvard Business Press.

Richmond, R. (3 Apr 2009). "How to cut payroll costs without layoffs." Business Week. Retrieved March 23, 2011, from http://www.businessweek.com/magazine/content/09_64/s0904048707309.htm.

Rist, J. (No date). Understanding and reducing payroll costs. Retrieved March 23, 2011, from http://www.nationalpayrollweek.com/documents/ForbesPayrollSection.pdf.

Stevens, C. & Karpinsky, C. (Fall 2009). Traps to avoid in cutting payroll costs. Retrieved March 23, 2011, from http://www.nhbar.org/uploads/pdf/BJ-Fall2009-Vol50-No2-Pg60.pdf.

Van Dijke, M., de Cremer, D., Box, a., & Arjan, E. (Mar 2009). "Procedural and interpersonal fairness moderate the relationship between the outcome fairness and acceptance of merit pay." European Journal of Work & Organizational Psychology,….....