Adjusting payments can be an appropriate measure of the firms to reduce costs and to cope with a crisis. Large firms could make use of the bonus flexibility in particular, which makes compensation more volatile (Milkovich and Newman, 1996). An alternative strategy of firms may also be an adjusting of the numbers of employees. The chosen strategy of a firm may depend on the possibilities rendered by the type of contracts signed with the employees and the extent to which
financial and demand constraints trigger cost reduction (Westergard-Nielsen and Neamtu, 2012). Small firms might have more financial problems, which could lead to job cuts instead 16 of using wage flexibility. In consequence, small firms’ bonuses may vary to a smaller extent than those of large firms.