Though it's not clear if this is a situation Wendy faces or if it's a behavioural question she's concerned about, either way it's a hard one. Assuming you're asked this at interview as a hypothetical question you might want to include the following points:

• It's never easy being the bearer of bad news, especially when it directly affects employees. Certainly very few would relish this responsibility.
• Explaining clearly and honestly why the salary cuts are necessary will be of paramount importance. Perhaps it was case of rather than retrench employees a salary reduction across the board meant avoiding that option. However employees will be concerned about further reductions in the future and discussions will need to be frank and realistic.
• Presumably if salaries have to be cut, all other cost saving avenues would have been explored eg non essential items such as biscuits, flowers, fruit baskets etc. Other cost cutting activities should also have been fully explored eg voluntary retirement, reduction in overtime and/or temporary employees etc. Salary reductions really should be a last resort.
• Additionally important is reassuring employees that everyone within the organisation is subject to salary cuts, this includes management. Expect questions such as whether or not the salary cuts are temporary and if so when might it be reversed. Though nothing is guaranteed presumably the company will have thought this through.
• Don't expect employees to be understanding - after all their living costs will not be reduced by 2%. Some will jump ship, because they can, others will feel they don't have that choice but this doesn't necessarily mean they'll happily accept.
• Inviting employees to come up with solutions to ease the pressure on the company is a useful strategy and makes employees feel they not only have a voice but also that their contributions are respected and considered.

What do you think? Blog us here with your suggestion for Wendy