JVA Corporation has a presence and expertise within the market of nearly two decades, during which period they have been faced with a wide array of challenges, but also opportunities. The company, for instance, has been able to expand into the increasingly popular and evolving technological sector, hiring better trained and specialized staffs. On the other hand however, the company has also faced challenges as a result of macroeconomic conditions, such as the terrorist attacks or the global recession. Today, the company finds itself in a complex situation in which they have to continue to function at high levels of performance and productivity, but also to reduce their operational costs. This need resulted from the financial hurdles brought on by the economic crisis. When numerous firms have downsized or even declared bankrupt, the JVA Corporation continued to operate and secure the employment of its thousands of employees.

The company as such employs 185,000 individuals across the globe, most of whom however are located within the United States facilities of the corporation. 3,500 of the employees are full time salaried managers, and the rest of 181,500 are operational staffs. The compensation packages of the operational staffs are based on a fixed hourly payment,...

Additional compensation incentives include premiums, profit sharing, travel rewards and commissions. All together, the additional compensation and perks for the 150,000 employees in the United States account for 8 per cent of the company's revenues. A new target is set on reducing these additional compensations to 5 per cent of corporate revenues.
At this specific level, a question is being posed relative to the mechanism that should be employed by the company in order to reduce costs and avoid any drastic measures, such as the closing down of some of the international plants. In this specific setting then, the proposed recommendation is of capping the current salaries of the employees (proposed strategy number one). This measure would be characterized by the freezing of the salaries at their current levels, without the provision of any new raises and bonuses. Additional compensations would also be frozen throughout the duration of the economic recession. In this specific context, the company would continue its operations as these have been completed so far, without integrating changes in its mission, vision or overall strategy. Furthermore, the company's performance appraisal system would be stopped during the…