5. Figure out who’s performing and who isn’t

Analyzing your budget for cuts is never easy, but it’s a little easier if you have identified what your company holds sacred.

“The thing for me is we just have to be sure that we’re giving good client service and we’re being loyal to true performers who have been good for Huron in the long run,” says Gary Holdren, chairman, president and CEO of Huron Consulting Group Inc., a $615 million management consulting firm. “There’s no secret sauce. What you’ve got to do is look at the line items, look at the details.”

That means an evaluation should reveal who your performers are — and, more importantly, who they aren’t.

“The first starting point is (making) sure that if 5 percent of the work force is not performing, you do what’s best for the 95 percent,” Holdren says.

Holdren’s system is simple: Each of Huron’s nearly 3,000 employees has a goal-setting meeting with his or her manager at the beginning of the year where they set goals for the employee. If people have promised to improve on things and simply have not, you might have an easy answer to your hard decision — especially if you mix that in with their overall productivity.

“The worst place you can be is to not do what you said you’re going to,” Holdren says. “So you’re the employee at the most risk if you’ve decided not to follow the conditions of employment. … If you have done everything Huron has asked of you and you’re making a good effort and just haven’t had as good a year, OK, you’re going to move up the pecking order. If you do everything Huron asks and had a good year, then you’re pretty bulletproof.”