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Robin Nourmand

Hi Tom,

I find your lesson regarding this quadrant to be the most profound of all four. It makes a lot of sense.

But what about when you are operating a small entrepreneurial company that cannot afford to demote a manager, continue to pay him his salary, and then hire a new manager who also makes a manager-level salary? I can see it work in a large organization, where you can afford to make room for the demoted "Still Valuable", but what about when it is too costly to pay twice?

Response from Tom Epley: First, if there is a lower position available, the salary of the individual in question cannot be that much higher than that lower position's ceiling salary so we're talking about a relatively small amount of cost penalty resulting from not lowering the salary. The reason not to lower salary is (a) it's very demoralizing, and (b) the difference will always be small. You tell the demoted person that he will not be receiving salary increases until his salary and his new job compensation standards get in line. If there is not a lower position open, then there is a difficult choice; either replace the incumbent in that lower position with the demoted person, or unfortunately you have then to terminate. In a small organization, where each $ and each individual's performance are both important, you cannot afford to have a non-performer, regardless of excellent attitude, remain.

Thank you in advance for your reply. See you Friday.

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