Salary Freezes

Recently my girlfriend and I have been discussing the policies that our employers have presented to us in wake of the current financial decline. We both work for country clubs in the Atlanta area. The club I worked for has decided to fire a few of the executives and maintain the employees that are seen as "the face" of our club, anyone who comes in direct contact with members, due to the fact that management sees these employees as vital to the way we do business. On the other hand, my girlfriends club has decided to enact a policy to reduce the bonuses received by employees in an attempt to ensure all the employees that they will have a dependable job that provides all of their employees a steady paycheck.

My first question for my girlfriend was, "how did the employees respond to no bonuses?" She simply said that many people were just happy to have a job and they realized the severity of our current economy. As a risk management student, I wondered which strategy would be more risk adverse. On the one hand, you may fire a few employees but be able to retain the status quo of the office environment or you could keep everyone and just reduce everyone's bonuses. I kind of prefer what my girlfriends club did by freezing all the employee salaries, because it provides security but at the same time when i received my Christmas bonus i definatly did my part to stimulate the economy, because the first thing i did was go out and spend the money I received.

So after further looking into this topic I found a news article about executives freezing their compensation... http://money.cnn.com/2009/02/09/news/economy/salary_freeze/index.htm?postversion=2009020914 I think its repulsive that executives of recieved the amount of benefits that they recieved in 2008 after their corporate profits tumbled. I understand the need to be well off and wanting to live a healthy comfortable life but honestly 18.4 billion in bonuses is just over the top... I doubt i could spend that much money on myself in the course of a lifetime.