Recession and Competition and Layoffs and Economy and Business Services and Human Resources and Employment and Strategic Planning and Business Topics and Government & Economic Development

Giving bad news the right way

March 16, 2009

Employers have the upper hand these days. Workers who endure pay cuts, elimination of 401(k) contributions, and other benefit reductions are keeping any grousing to themselves. Often, they're just thankful they still have a job during the worst economic slump since the Great Depression.

It's an environment that brings out the worst in some stressed-out managers. We've all heard horror stories of workers who got the ax in less-than-compassionate ways — even via e-mail — and with skimpy severance or none at all.

You can't blame companies these days for laying off workers — at least not those firms that make the cuts as part of a well-thought-out strategy, rather than out of sheer panic.

But the smart managers know that, one day, the tables will turn, and the firms that show grace and class now will have their pick of top performers later. Following the Golden Rule is not only the right thing to do; it's good for business.

As veteran human resources consultant Karl Ahlrichs says, "The word on the street is a powerful thing."

He added: "How an organization handles these high-stress moments gives a clear picture on how they handle everything."

It's not only about attracting future workers. It's about energizing workers who remain. They'll have better morale, and be more productive, if they feel their friends who got pink slips received fair treatment. Shabby treatment has the opposite impact, leaving remaining workers feeling less valued and fearful they'll be jettisoned as well.

Faring well for compassion is Emmis Communications Corp., which this month cut 104 employees, or 7.5 percent of its work force. It also cut the salary of remaining employees 5 percent.

Neither move went over well, of course. But the company is struggling so mightily that many workers might have understood if they received chintzy severance. Instead, the company awarded "enhanced severance" because it recognized workers would have a harder-than-usual time landing new jobs.

Standard severance ranges from two weeks for workers with less than a year of service to six months for senior managers. The enhanced plan extended the severance to 12 weeks for workers with less than a year of service and up to 15 months for senior managers.

"Our employees are the core to Emmis' strength," company spokeswoman Kate Snedeker explained. "It is painful to let any of them go at any time, particularly in these challenging times."

The show of good will didn't come cheap. Emmis is spending $4.2 million on the regular severance. The additional severance will cost another $3.3 million. But making that investment sends a resounding message to remaining workers and to the marketplace that will benefit the company for years to come.

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