How to Communicate Bad News to the Employees? The HRD dilema
Before understanding how to communicate a bad news to the employees, will it not be better to see a glaring example of how a bad news should not be communicated? One of the biggest private airlines of India, in February 2008 did precisely that; the whole matter became a grand fiasco and the management ended up as a corporate laughing stock for a while.
Jet Airways, on 15th February 2008, announced all of a sudden to lay-off about 800 staff (flight attendants), who had been recruited earlier on a temporary basis, citing reasons of non profitability in operations . While the company might have felt justified in taking the "legally correct" stand (as the sacked temporary employees, as per their terms of contract, were liable to be taken off the roles at any point of time without prior notice), the suddenness of the operation created shock waves in the organization.
Most of the sacked employees had entered into the office in their full uniform, ready to go ahead with their daily chores, when the unceremonious announcement fell like a bombshell, turning all of them out of the gate into the roads. Many of them could not bear the shock and were in tears.
Many of the sacked employees turned up to Raj Thackeray, a local political leader of great nuisance value, seeking his help and intervention. Like a true politician, with a reputation for strong arm tactics, Raj Thakeray immediately offered to support the retrenched employees and he announced that no Jet Airways flight would be allowed to take off from Mumbai if the airline does not reconsider its decision to terminate the services of 800 flight attendants.
On 17th February, the Chairman of Jet Airways, Naresh Goel overnight reversed the decision. He announced: "I was shaken after I saw all the grief around; I cannot see tears. I have faith and am answerable to God and my mother who is no more. ... My management may not like it but I cannot sleep with my conscience pricking. ... My employees are my family. ... I decided on my own to call them back."
Two things that made the whole episode laughable were these: He said that the decision was not based on any political pressure. He further claimed that he was unaware of the reasons for the retrenchment of the employees. He said that the decision was that of the company's top management, who were responding to the difficult economic situation which the company was facing, and that he himself wasn't aware of the details!
See the so called communication break down! The chairman of the corporation "is totally unaware of such a sensitive decision" and the likely fall out of it! Okay, big people require some face-saving statements and let us accept them with pinch, er, a spoonful of salt!
Now this is the characteristic case of HRD failure and we can learn many lessons from it. How could have such a comic catastrophe been avoided?
(1) In such a highly sensitive decision like a large scale retrenchment, there should never be a surprise element. Also, rumor mongering should be avoided.
(2) At least one month before putting such an inevitable decision into action, the management can send personalized newsletter to all the likely-to-be-sacked employees about the facts and figures of economic difficulty the company is facing and hinting an imminent possibility of a large scale down sizing, which will, at the bottom end, affect all the temporarily employed staff.
(3) Such a communication should also clearly, but gently state the legal right the organization has to terminate employees without prior notice, by quoting the appropriate class in the terms of contract.
(4) The newsletter should also advise the staff to start immediately looking for alternative jobs.
(5) It should also leave a brief line of hope that, in future, if and when the company turns around for better, the company will give top priority to consider them for re-employment (though such a case may be too remote and impractical).
(6) The company should specifically name a few persons in the HRD department as counselors who can be contacted for any clarifications, advice or any other job related issues.
(7) The counselors should be hand picked by the management and adequately groomed to be highly patient and sympathetic to the employees who may contact them under panic and try to whip up emotions.
(8) Simultaneously, it is important that the organization keeps the outside world too informed of the impending matter, through official news releases. Any statutory legal procedures to be followed with local Government may also be initiated in time to avoid head aches later. Official announcement of a bad news is better than allowing rumors to float.
(9) At least a week before the date of retrenchment, another individualized letter should be delivered to the employees conveying the bad news officially and asking them to settle any pending issues about their leave pay, overtime, perks etc, if any, well in advance. The letter should be very warmly worded profusely thanking them for their contribution to the organization.
All these procedures should become part and parcel of the corporate culture and ethics of the organization. Culture and ethics can only be enforced in an organization by high standards set by the top management.