Final answer:
Brain drain is the term used to describe the departure of high performers from an organization, often due to poor business conditions such as wage cuts. It is a costly issue for companies as they lose skilled talent, and it usually results in layoffs and firings rather than across-the-board wage reductions.
Step-by-step explanation:
The loss of high performers who choose to leave an organization is known as brain drain. This phenomenon implies a costly loss to an organization as it tends to lose its most talented and skilled employees. This situation often arises when employees react to poor business conditions, such as wage cuts. Employers facing adverse business conditions may reduce wages across the board, leading to an adverse selection where the best workers, having better employment alternatives, are the ones who leave first. Meanwhile, the least attractive workers with fewer employment opportunities are more likely to stay. Companies experiencing difficult times will often opt for layoffs and firings, rather than reducing wages for all their employees, to manage costs more strategically.