Communicating Takeaways - How Little is "Too Much?"

The latest issue of Knowledge@Wharton - for me, a great resource for all kinds of business information - just published an article titled, "'Don't Touch My Perks': Companies That Eliminate Them Risk Employee Backlash." It starts off by discussing how Google decided to "dramatically raise" the price of its day care program, and employees WEPT when they heard the news. (I'm not sure these folks would receive too much sympathy in Detroit, but that's another story).

According to Wharton management professor Nancy Rothbard, "Once you have the perk, to take it away is seen as a violation of a psychological contract you have with your employee."

Here, Here. As the old song goes, little things mean a lot. I once worked for a company named Shared Medical Systems, which was acquired by Siemens of Germany. SMS grew from its three founders to a multi-billion dollar enterprise, but its earlier entrepreneurial roots led to some traditions. One was "Doughnut Day," when the company provided all employees with doughnuts on the last Wednesday of every month. It doesn't seem like much, but when a handful of people are trying to get a brand new company off the ground, it's a nice touch. And it became part of the company culture for more than 35 years. When Siemens acquired SMS, they wisely announced, "We will still have Doughnut Day." Some traditions die hard.

Wharton management Peter Cappelli points out certain perks like Doughnut Day are cheap or may even cost nothing (e.g., casual-dress days), but they don't hurt the bottom line much either, so companies should be careful in the way they handle them. "If you are taking anything away from employees, it's important to explain the need for doing it," he says. "It helps a lot if the need is something driven by factors outside the firm. The need to improve share price isn't going to satisfy a lot of people."

This is hardly a new issue. Think of the benefits that previous generations of U.S. employees used to take for granted: fully paid health insurance, fully paid health insurance upon retirement, pensions, subsidized cafeterias, even mandatory overtime pay. (Yes, overtime pay used to be written into labor contracts - a harbinger of the end of American competitiveness). For those of us in communications, the challenge is how to inform employees of such changes and helping to minimize resentment. Here are some ideas based on my own first-hand experiences:

1. COMMUNICATE CHANGES IN TERMS OF INDUSTRY TRENDS - When I was with GE, which is still a leader in human resources, we announced co-pays for health insurance. This did not go down well at first, as GE was always known as a paternalistic employer. However, GE was also among the last companies to provide completely free healthcare. So we informed employees of all the companies, especially local one, that had instituted the change before we did. It brought down the grumbling at least a little bit.
   
   
2. TIE THE NEED FOR CHANGES TO THE BUSINESS'S COMPETITIVENESS - Referring back to GE, each business unit communicates its own situation. Many during my tenure, such as turbine manufacturing and certain defense businesses, were being buffeted by changes in their respective markets. Once employees understood that such changes were needed to keep those business alive, the employees were (somewhat) more accepting.
   
   
3. EXHIBIT FAIRNESS - If it's one thing that the average employee can't stand is to see one standard for themselves and another for executives or other management. So let them know that the bosses are forgoing their bonuses, or losing their dedicated parking spaces, or paying the personal expenses on their company cars.And if such changes are NOT being shared, well, you have an additional set of issues, don't you? Better look inside your chests and see if there is still a heart there.