During the economic recession in United State in 2008, Honeywell International Inc. experienced are dramatic drop in demand for their products. Usually, for an labour-intensive company like Honeywell, they will make a decision to reduce the staff trimmer in order to reduce the operating costs of the company. However, the CEO of Honeywell, Dave Cote chose to survive this economic downturn in a different way.

He believed that to make a some employees to be on leave without pay for short period so that no one get fired and everyone can therefore “feel better”. However, I think this is not a wise decision. The employee with a better efficiency will feel uncomfortable for the loss they suffer during the leave. They could enjoy a higher wages if company simply decide to have a job cut. Some of them eventually decided to leave Honeywell due to their insatisfaction. For those employees with a lower efficiency, they get to be “on a vacation” for a longer period of time and they couldn’t even survive with the little wage they earn. Keeping them to work in company cannot bring any extra value and it could be damaging especially during the recession period.

Source: http://honeywell.com/About/Pages/ceooftheyear.aspx

http://hbr.org/2013/06/honeywells-ceo-on-how-he-avoided-layoffs/ar/1