A blog about reputation, marketing and employee morale.

Smart companies communicate with employees before disclosing policy changes to the Media

Posted by Janet Smith on April 29, 2008

A question on LinkedIn submitted by Arvind Mittal caught my eye the other day:

Share your thought: How good is this, for a company’s Health to disclose a Personnel Policy in Media without informing to the employees?

Arvind, manager of business development for a consulting firm in India, referred to recent headlines regarding ICICI Bank, the second largest-bank in India: ICICI shelves big hikes, promotions this year. Then he wrote:

I have received calls from many people working with ICICI Bank and everyone mentioned about this news, most of the employees are feeling cheated, said that this is not the right way to announce such thing, the management should have informed the employees by internal memo then publishing in the news paper.

Share your thoughts why such announcements are done? What are the benefits management expecting by this action? How should employees act in such situation? Should they quit or stay?

I was among a number of responders to Arvind’s question. Here’s what I wrote:

Employees feel devalued when an employer doesn’t make the effort to inform them of news in advance. This is one of the reasons why 75% of all employees don’t feel loyal to their employers; 60% of all employees are looking for another job; and less than half of all employees aren’t happy at work. Employees feel unappreciated, disconnected, and overlooked. The ICICI employees have every reason to be outraged! I suppose if many employees quit over this, it would send a message to management. Even that might not do any good, though. Unfortunately, companies that don’t feel a need to adequately communicate with their employees typically have arrogant leaders that are so focused on the bottom line (and their own bonuses) that they aren’t concerned about the morale of their employees. They don’t realize that low morale directly impacts the bottom line…as well as the reputation of the company. There are way too many business leaders with this callous, impersonal attitude. Fortunately, there are also many great leaders who are sensitive to the feelings of employees, and realize the importance of communicating and showing appreciation. I hope many of the ICICI Bank employees can find new jobs with companies that have better leaders.

Want to demoralize your employees? Let them learn major news about your organization from a newspaper article or the evening news…along with the rest of the world. It’s guaranteed to kill morale…and damage the reputation of your organization.

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