Let It Rip

By Nancy Hatch Woodward Sep 1, 2005
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HR Magazine, September 2005 ​Announcing change all at once may hurt in the short term, but it gets the pain over with quicklyand then employees can move on.

Whether it’s telling employees that their health insurance co-pays are going up for the third year in a row or that the office is relocating to another state, there seems to be no lull in the changes that need to be communicated to employees.

“Change has become built into our American psyche,” says Robert Tyminski, a psychologist in San Francisco who works with both companies and employees to deal with change issues.

Which begs the question: If employees expect constant change, why do they take it so hard? Simple, explains James E. Lukaszewski, chairman and president of the Lukaszewski Group Inc. in White Plains, N.Y., which specializes in management communications. “They don’t take change well because when it comes to communicating changes to employees, every company does it badly.”

It’s not that companies don’t care or don’t attempt to do it well, he says; it’s just that when you are dealing with decisions that affect human value systems, emotions run high. In those situations, it’s hard to get the right message through. Good communication, then, becomes the dynamite that breaks down those barriers. And it’s what employees want most in times of change.

Still, executives resist. HR needs to convince them that communication must be ongoing and honest no matter how bad the anticipated outcome. It doesn’t matter if you are telling employees they are being laid off, the company’s pension plan is being revised, or employees have to pay $1 for their soft drinks, instead of 75 cents. The rules for communicating are the same.

The Urge To Withhold

Employees want and need to trust the management of their organization. “Work is a place of structure for most people,” explains Tyminski, and when that reliability is shaken, when things change, there is a natural anxiety. Keeping workers in the loop is essential to keeping their trust.

If there are a number of changes going on at a company, it’s much better to let employees know as much as you can as soon as you can, says Tyminski. If you are going to be changing benefits, don’t just cut one, and then a few months later reduce another, and then a month later make changes to a third.

“The slow drip approach tends to create more anxiety and a sense of mistrust in employees,” he observes. “So, what happens is, not only are you telling people they are losing a benefit they have come to expect, but you are also creating an expectation of ‘Oh, what’s next?’ It ends up building up levels of dissatisfaction that spill over into productivity.”

Sometimes, though, the organization doesn’t know all the details or have all the answers. But Lukaszewski thinks waiting for all the information is impossible. “I have been doing this for 30 years and never found a management that knew everything at any time about anything. It is simply a stalling device masking an unwillingness to cause pain in people’s lives,” he argues. “Open communication works better and helps foster employees’ trust.”

The advice is the same even if the change is the worst sort of news, such as mass layoffs. Tyminski suggests making the announcement and giving the business rationale for it.

Next, tell employees that once you’ve completed all of your fact-finding, you will evaluate what you’ve learned and will update them about any other possible changes. It’s imperative, however, that you give them a specific time frame for when and how they will receive more information.

Of course, companies sometimes have excellent reasons for withholding information. For instance, public companies may be under specific disclosure requirements for announcements such as mergers or layoffs. The key is to let the information flow as soon as you can.

Maintaining the Flow

Margaret Epperheimer, director of global HR communications at Hewlett-Packard (HP) in Palo Alto, Calif., says change is just part and parcel of everyday life at large companies. She should know. The company has undergone tremendous change in the past three years due to its merger with Compaq Computer Co.

Then, in July, HP announced its largest layoff since the merger: 10 percent of its workforce worldwide, or 14,500 workers, half of whom are in the human resources, finance and information technology functions.

Epperheimer credits the communication infrastructure in place before the layoff announcement with easing employees’ fears.

“You can’t just wake up one day, when a big announcement is coming out, and decide you are going to communicate to employees that day,” she says. “You have to look at change communications as a continual process with peaks when you have special announcements to communicate.”

She urges other companies to develop a communication strategy even if there are no major events on the horizon. “We develop detailed, ongoing strategic plans around communications,” explains Epperheimer, in which larger change communication activities can be plugged into place.

Because of that infrastructure, the July layoff announcement went smoothly. “It was just like what we have seen before” in other communications, says Tony Quinlivan, marketing manager at HP. “I was actually comfortable with the way the announcement came out because it felt fair in the sense that everyone was receiving the same level of information at the same time as appropriate.”

Quinlivan also notes that the communication process at HP continues to improve. By the time the July layoffs were announced, he says, “managers were available, everything was crisp and concise. And I think that helped allay some concerns that people might otherwise have had.”

When there is more news to report, HP employees know exactly where to go—the company’s intranet. “We continually use it to engage employees and build a sense of community,” says Epperheimer. “We drive our employees to the portal by sending out a twice-weekly news digest and keeping the content fresh, exciting and engaging. The goal is to drive employees to the site, so when there is breaking news, employees know immediately where to go.”

If you don’t provide a place for employees to get information, rumor mills will fill the void. HP learned firsthand about the rumor mill during its acquisition of Compaq. During that time, HP established an Internal Communications Program Management Office, with all 150 of its internal communicators. This coalition helped coordinate communication activities, ensured the consistency of messages and allowed the company to mobilize quickly across the entire organization when it needed to respond to rumors.

Interactive Communications

Last November, HP went a step further by launching Ask HP, its tool for two-way communications. “We have always had a policy of open communication,” notes Epperheimer. Employees can send an electronic message to their manager, their manager’s manager or even the CEO if they have questions. Employees are guaranteed a personal response within five working days.

“I want to have specific avenues where I can go to for information, to ask questions and learn more,” says Quinlivan.

But, Epperheimer notes, HP wasn’t tracking employees’ common questions. Now Ask HP does that by aggregating the data monthly and reporting it to senior management.

Lukaszewski suggests having an intranet site dedicated to the topic at hand. There, you can post employees’ questions with answers, transcripts of employee meetings, interviews with senior executives, or any other news that deals with the topic. This helps employees feel more comfortable with what they hear.

“The key to providing good communications, especially during times of transition or change, is to provide a way for employees to ask questions and to comment on events,” says Warren Bickford, international chairman of the International Association of Business Communicators and vice president of Gryphon Reputation Management in Regina, Saskatchewan. “They have to feel that they are part of the organization. Certainly, their managers or supervisors will be the first place they can go, but you have to provide other venues for employees that give them timely feedback.”

Face-to-Face Communications

Senior executives are an integral part of your message to employees. It is absolutely critical to have your senior leadership available and in as many face-to-face situations as possible, says Bickford.

That may sound obvious, but, according to John Fleenor, group director of knowledge and innovation resources with the Center for Creative Leadership in Greensboro, N.C., it’s not at all unusual during times of change for the executive staff to disappear into their offices, close the door and not come out.

“That is the worst thing they can do,” he says. Instead, they need to be out there communicating, not hiding and giving employees the idea that they are hiding something.”

The executive message is only one part of the communication strategy. As HR professionals know, a company’s best communication tool is its managers. According to a recent Towers Perrin survey, employees revealed that they view the information emanating from senior leadership as the least reliable, with 48 percent agreeing that they receive more-credible information from their direct supervisor than from their company’s CEO.

People want to hear news from the person they report to, especially if it’s a significant change, because that is the person who represents the organization to them. “There is that immediate trust,” explains Quinlivan, “because of the working relationship you have with your manager.”

This means that managers must be well versed not only about what is changing, but also why the decision has been made. At HP, the company has developed specific venues for managers to help keep them informed and prepared for discussions with employees by providing them with tips, talking points and Q&As. In addition, the company has set up a special web site, as well as a monthly newsletter, for its 17,000 managers.

The groundwork has paid off. With the recent layoff announcement, what was important to Quinlivan, he says, is that “the managers—not just my line managers, but higher-level line managers—were available to discuss what the announcement meant.”

Don’t Forget Your Staff

Change can be particularly difficult for HR employees. This can be a stressful time for them. They are the ones who are often involved in delivering the bad news, says Tyminski, as well as having to deal with those who are upset about the change.

This can be especially hard if the company is announcing layoffs or relocations and the staff is friendly with some of the people affected.

Make sure your HR staff has support and training during these stressful times to help them through the transition too.

“At HP, HR realizes that it leads, communicates and implements change not only for the whole company but also within itself,” says Epperheimer. “It’s absolutely crucial that HR employees are not overlooked, because in one form or another they are directly impacted. We are in the front lines, whether it’s a comfortable change or a difficult change.”

Nancy Hatch Woodward is a freelance writer based in Tennessee and a frequent contributor to HR Magazine .

Web Extras

Whitepaper: No News is Not Good News: Communicating With Your Employees in Tough Economic Times 

2005 Organizational Communication Poll - A Study by SHRM and CareerJournal.com 

Employee Trust and Loyalty Findings- A Study by SHRM and CareerJournal.com

Involving Employees

Sometimes employers put off sharing the news of a change because its a topic that employees have become cynical about, such as health care. Typically, companies end up communicating about it once a year during annual enrollment. Companies tend to use a shotgun approach, admits Brian Marcotte, vice president of compensation and benefits at Honeywell, a technology and manufacturing company headquartered in Morristown, N.J.

The message is typically negative because the costs are going up and plan designs are usually changing, he says. So, when we thought about how to engage our population on this topic, which can be beneficial to them and to the company, we knew we had to take a different approach.

Honeywell is self-insured, so educating employees about better health care choices helps employees understand why costs are going up and why employees need to change the way they view and use health care options. But first Honeywell had to overcome its employees cynicism.

The best way to find out how to do that was to go directly to employees. The company started with four employee task groups made up of 20 to 25 employees. The groups met for 10 months, helping craft the messages, determine avenues of communication and identify the materials to be used. The task groups proved indispensable, but that was because leadership really listened, respected their opinions and followed their advice.

Some of the best practices leadership learned from these employees included:

Make sure there is information for all employees. Dont just direct health tips to those who are chronically ill. If you can drive employees to the information while they are healthy, they will automatically go there for advice when they are ill.

Keep educational workshops short and to the point. An hour is plenty of time.

Dont make the workshops mandatory; it will defeat your point. Still, out of 60,000 domestic employees, Honeywell had 20,000 employees come to its first session and 30,000 come to the second one.

Use outside experts to make your point. Honeywell used clips with NBCs Tom Brokaw, as well as physicians from Dartmouth University.

Anticipate the unusual question. Task force members raised unexpected issues, such as whether care consultants would be located in the United States.

Even though Honeywell has launched several new initiatives to engage its employees, the task groups still meet, further facilitating communications. It must be working: Honeywell is beating the trend of rising health care costs by several points, and, as Marcotte notes, thats worth about $10 million to $15 million [a year] for us.

Size Matters

A June 2005 study by the International Association of Business Communications, titled Thinking Big, Staying Small: Communication Practices of Smaller Organizations, found that companies with fewer than 20 employees tend to share news with each other on an informal basis, because the head of the company usually sees each employee during the day.

Once a company reaches between 20 and 50 employees, that dynamic shifts and more-formal communication methods are needed. It behooves employers in this range to make sure they are no longer just relying on word-of-mouth, but instead have specific plans for communicating with their employees.

Companies with more than 50 employees will absolutely need formal structures in place, as well as a specific person to serve as the primary communicator.

Where's the Trust?

Theres room for improvement when it comes to employee trust. 

70 percent of employees believed their organizations leadership was extremely or moderately trustworthy. 

20 percent rated their leaders as only mildly trustworthy. 

11 percent believed the organization was not at all trustworthy. 

Source: Employee Trust and Organizational Loyalty poll by the Society for Human Resource Management and CareerJournal.com, 2004. 

Percentages may not total 100 percent due to rounding.

51 percent of workers believed their company generally told employees the truth. 

60 percent thought their company communicated more honestly with shareholders than with employees. 

55 percent believed their company worked too hard trying to spin the story. 

Source: Enhancing Corporate Credibility: Is It Time to Take the Spin Out of Employee Communication? Towers Perrin, 2004.

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