Sunday, September 09, 2007


The president of a small sales company in the Midwest was distraught. As he stepped forward to address his assembled employees, they couldn't help but notice that he was choking back tears.

He told them that a major equipment company, one that represented the bulk of his small company's sales, had sent him a letter accusing the company of breach of contract.

"He informed us that everything would be OK and not to worry," one employee writes, "that the allegations were false."

He didn't tell his employees what the allegations were, however, and he didn't go into specifics about whether any of their jobs were in imminent danger. The meeting broke up, but several employees worried that there was more to the story than the president was telling them. They turned to the Internet, where they found documents relating to a lawsuit that the large company had filed against their own company, as well as a breach-of-contract letter with a termination date to end the two companies' contract. The large company subsequently had withdrawn its lawsuit. However, it had stated its intention to send a new breach-of-contract letter with a new termination date.

If the contract between the major company and my reader's company were terminated, he says, about 70 people would probably lose their jobs immediately.

"Does the president of the company owe his employees an explanation of the problem?" he asks. "And are we entitled to know the new termination date?"

From a management perspective, to raise the specter of potential doom -- but to do so in broad terms, without letting employees know the specifics of the situation -- does little more than create an atmosphere fraught with free-floating anxiety. Seeing the president on the brink of tears, even if he's telling them not to worry, does little to shore up employees' confidence in the health of the company or of their jobs. They're left wondering what, if anything, they should be doing to help the company or, more likely, how quickly they can find a job at a more stable place.

Given that the breach-of-contract letter has been withdrawn and no termination date is currently proposed, the president might simply keep the situation to himself until something definite takes place. It wouldn't be at all unethical to do so.

If he does choose to make the situation known to his staff, however, it isn't fair to simply raise the specter of mass layoffs without any concrete information. He might, instead, engage his employees in helping to find a solution to the problem. Or he could tell them that management is addressing the problem and outline its strategy to rebuild the relationship between the companies, find new business or otherwise carry on. Either would be the right thing to do.

The wrong thing to do is to spread panic and then go back into his office and close the door. To go halfway isn't fair to anyone in the situation. Even if the president actually does have a plan to save those 70 jobs that my reader assumes will be cut, his staff doesn't know it. A big risk of raising a specter but not leveling with the employees on the details is that they, like my reader and some of his colleagues, may assume the worst.

c.2007 The New York Times Syndicate (Distributed by The New York Times Syndicate)

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