Academic journal article Public Relations Journal

Giving Employees Bad News: How to Minimize the Damage

Academic journal article Public Relations Journal

Giving Employees Bad News: How to Minimize the Damage

Article excerpt

The headlines of newspapers nationwide are ablaze with stories about wage freezes, mergers, plant closings and scandal in Corporate America. It's no wonder employees of these companies harbor anxieties about their job security and the future of their workplaces.

Even when dispensing unfavorable news, forthright and timely internal communications play a major part in quelling the fears and doubts of employees. Employees seek honest answers directly from management, not speculative stories in the morning newspaper.

This article shows how six companies have used employee communications to convey bad news. In each case, the company has faced negative public opinion, uncomplimentary news coverage, internal shake-ups, or simply slumping profits, either recently or in the past few years.

Boeing has had to handle massive layoffs. Northwest Airlines also faced cost and wage cuts, along with a public court battle over fares with a major competitor and an unfriendly media environment. Empire Blue Cross Blue Shield recently faced a scandal over its financial management and personnel changes at the top, along with 25% to 30% annual health insurance premium cost increases that had consumers and some of the press screaming. Time Warner Inc. struggled through four years of cultural upheaval caused by an expensive merger involving a hostile takeover, compounded by its production of controversial products and management maneuvering at the top of the company. And, two years ago, Citibank, Inc. embarked on a worldwide campaign to shore up its profitability.

Regardless of the messages involved, all of these organizations have gone to great lengths in efforts to share up-to-the-minute controversial news with employees. They used various communications tactics and mediums, including:

* Special editions of company-produced newspapers offering lengthy explanations of all pertinent events as well as progress reports in letter format from the president/CEO.

* Videotaped or in-person appearances by the company's chairman of the board/CEO addressing employee concerns such as the company's financial stability, job security, opportunities for career advancement and market share erosion.

* Monthly staff meetings for officers and directors during the crisis period to keep everyone abreast of the latest news. Mid-level managers are also encouraged to "be there" for employees they supervise to foster a "we're all in this together" attitude.

* Town meetings, allowing open forums between the president/CEO or managers, and randomly selected employees.

* A series of mental and physical health workshops aimed at helping employees deal with job-related stress on their lives.

* Programs to encourage employees to stay charged and professional.

Established communications systems allow for a quick turnaround of information in a highly volatile or crisis situation. But lessons in crisis communications are sometimes learned along the way. After its merger, Time Warner Inc. had to overcome the internal communications barriers between six decentralized, autonomous business divisions. It has taken years, but the company now has a smooth, workable total system. Two merged Kansas-based power companies learned a similar lesson when they tried to build a new, integrated culture.

Northwest's spiral of turmoil

Northwest Airlines had a convergence of several negative events all at once, starting in the summer of 1992, said Jeff Smith, director internal communications for the St. Paul, MN-based company. A federal court battle developed between Northwest and American Airlines after the latter made deep fare cuts. "That started a spiral of bad (revenue) months for us," he said.

"In spring '92, we had no other alternative but to ask our labor groups to begin negotiating more than $900 million in reduced costs over three years," Smith continued. "The lengthy process of those intense negotiations and all of the information and misinformation about the company caused a great deal of anxiety internally. …

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