CASE # 13
FINANCIAL COMPANY
For many years, a large
financial services company with thousands of employees grew like a bad weed.
The biggest challenge was always on hiring enough people to keep up with the
growing business. Almost overnight it seems, business began to drop off - due
to changes in the entire economy and other industry factors. Layoffs were
rumored. When employees confronted their managers, they were told not to worry.
Rumors persisted. Eventually, there was an announcement that some people would
be offered early retirement and other incentives to leave. Some people took
advantage of these right away. As time went on, groups of employees were given
"end dates" and offered termination packages. Several rounds of
layoffs occurred, often happening unexpectedly. Managers could not give their
employees specific details about what was happening in their units, nor were
they willing to talk to them about what was happening in the company. Many
employees felt that even their own managers did not know what was happening.
Some employees' end dates were extended; others were not. Over a period of
almost a year, promises changed, probable end dates changed, possibilities for
other job transfers within the company changed, layoff's continued to happen
sporadically. The company was inconsistent in its messages to employees about
their future, as well as inconsistent in most of its communications (both
written and verbal) to employees about the company's future plans. Human
Resources functions, which should have been able to help employees deal with
transition issues, was downsized and kept in the dark as well. Many employees
suffered from stress, some becoming extremely ill or finding therapists to deal
with their anxiety. This stress led to lack of motivation to do their job, as
well as lack of confidence in finding another job (inside or outside the
company). Lawsuits were eventually filed on behalf of some employees who felt
they had been discriminated against on the basis of age, sex, race or longevity
with the company. The company "seemed" to be getting rid of the
long-term employees, older employees and highly paid employees according to
those that remained. All employees were facing additional stress, since the
messages from the company had been so unreliable and inconsistent. Often, there
was simply no communication from management about impending layoffs. Some
managers admitted that they were afraid for their own jobs. Delaying difficult
decisions does not make them easier. In fact, it may make the process even more
damaging to the affected employees. Refusing to provide even basic information
or deliberating withholding important information from employees set up a
company for legal retaliation from harmed employees. Lack of communication on
such important matters as whether an employee has a future is asking for
trouble. The morale and productivity of the entire workforce has been destroyed
because of what seems obviously to be inappropriate communications and
inappropriate actions on the part of corporate executives. The company will pay
for these weaknesses painfully for many years and in many different ways. The
employees who are left will never again trust management to tell the truth.