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When Change Challenges Trust

September 1, 1996
Related Topics: Change Management, Featured Article
The Dilemma:
In the beginning there was a trumpets-and-fanfare announcement about the productivity change initiative. Six months later, it’s clear the changes haven’t been sufficient to meet management’s financial goals. As director of HR, you know layoffs are a possibility. You also realize that maintaining morale and employee trust are equally important. How do you respond when employees—including your own staff members—cautiously ask how things look for the future?

Readers Respond:
As a senior HR manager, I need to be proactive and sensitive. As soon as I realize that despite the changes under way layoffs can’t be ruled out, I need to plan for an effective communication strategy. That means establishing an understanding with top management—in advance —about what, when, how and by whom the demoralizing news will be released. The objective is to minimize the effects of the negative news as well as to avoid unhealthy rumors.

When such a plan is in place, and procedures have been rehearsed, I’d take the initiative to communicate the details to the staff. If such a plan isn’t ready and I’m approached by the staff on the subject, I’d confirm the company is looking into ways, including staff measures, to reduce costs or to meet the target goals. I’d emphasize that HR remains the most valuable asset of the company—and full staff consultations will be conducted before management makes decisions affecting employees’ careers. I’d also indicate when they can expect a formal announcement—which should come as soon as possible. Delays will result in uncertainties and, therefore, adverse effects on staff morale and loyalty.
Charles Mak
Charles Mak & Associates
Calgary, Alberta

I believe the best response is to explain the truth—that business isn’t good and unless things turn around there are possibilities of reductions in force (layoffs). Deceiving employees can only lead to future distrust of your credibility.

I would solicit staff members’ ideas as to what might be done to meet business plans to avoid such actions. I would present this as a challenge to the group with individual goals and predetermined time lines. I’d follow up with frequent meetings to review progress and provide positive rewards for every improvement in performance that contributes to financial goals.
Ronald Velasquez
Former Director Industrial Relations

Purina Mills Inc.
St. Louis, Missouri

I believe that when such a question is posed, an honest answer is best. The way one conveys that honesty is going to be the catalyst for action or inaction. I would attempt to put a spin on the situation that gets the whole organization involved in the responsibility for change. This would require that the explanation invoke a vested interest in the company’s success.

We all see things differently. Typically we tend to find it easier to attempt to change others rather than to concentrate on changing ourselves. So, in any kind of change management, there has to be a degree of change shown by those initiating it. The behaviors must be visible and deliberate.

I would explain that these changes are important to the survival and growth of the company—and that so far the efforts to change the organization for the better haven’t been successful. I would also convey that management views these changes as "a requirement."

Workers need to feel that there’s a "payback" for change, so at this point I would explain the rewards. Obviously, if the company is doing better, then those within the company will do better. They’ll experience an increase in programs, perks, benefits and pay. They’ll also enjoy a certain amount of job security with the attained goals. It’s everyone’s responsibility—from the janitor to the COO—to work toward company goals and fulfilling the company mission to serve its customers. Without full commitment, cutbacks will be inevitable in order to survive.
Kelvin Ham
Manager, Human Resources
AMBAC International Corp.
Columbia, South Carolina

My response to such inquiries would be as follows: The change initiatives we instituted six months ago have failed to yield the level of results we anticipated. As a result, we’re in the process of reevaluating these changes, and I’m personally asking for your help in this process. While I’m hopeful that we’ll see immediate improvement, there’s the possibility that we may be required to find alternative methods to reduce expenses, one of which may be staff reductions. For now, let’s establish some short-term action plans to contribute toward the change modifications.
Phil Brunoe
HR Solutions Inc.
Harleysville, Pennsylvania

Employees need to know how the changes are affecting the bottom line. Not dealing with their questions honestly will further heighten their anxiety. The employer should solicit employee ideas about how to make the business more profitable. Employees should be assured that the company will do everything possible to eliminate the need for layoffs.
George W. Laing
Human Resources Manager
Clark Public Utilities
Vancouver, Washington

Personnel Journal, September 1996, Vol. 75, No. 9, pp. 143-145.

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