Does Dave feel our Pain?

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In Tough Times, Management Must Be Open and Buttress Worker Mora

Posted by Web Site Staff on 04/08/2003 at 04:14 PM

US Airways may have emerged from bankruptcy protection, but the carrier still faces one of its greatest challenges: how to rally demoralized employees who have seen their wages cut and their colleagues furloughed.

Airline union leaders frequently use such phrases as loss of faith, stressed out, angry and frustrated to describe the mood of the rank and file. And it''s no wonder. Since 9/11, US Airways has slashed its payroll by 3,000 locally and 11,000 systemwide; coaxed some $1 billion in annual concessions from workers; entered bankruptcy and exited a much smaller carrier.

The burden for keeping everyone happy may be an impossible one given the stark background, but US Airways Chief Executive Officer David N. Siegel has taken steps to try to soften the blow. Even while wielding the cost-cutting ax, he has praised employees and their union leaders for their sacrifices; held mass meetings to reassure workers the airline was doing all it could to mitigate layoffs; and started weekly telephone messages to employees with Hi, this is Dave -- a friendly, informal tone that few could ever imagine coming from the mouth of his predecessor, Stephen Wolf, who was known for his imperious manner.

Siegel has even taken a cue from former President Bill Clinton, whose constant assurances that I feel your pain became the stuff of parody. When US Airways recently announced that it was temporarily imposing a 5 percent wage cut because of the drop in bookings due to the war with Iraq, Siegel was quick to tell reporters that the wage cuts included him as well. And on Halloween, he donned an Austin Powers outfit when meeting with employees in an effort to lighten the mood.

Whether Siegel and his management team have won over many skeptical US Airways employees remains to be seen, but consultants say the steps they have taken can''t hurt. And it''s clear that his gestures aren''t just a matter of making employees feel good.

Airlines, after all, are ultimately a customer service business. Indeed, most of US Airways'' employees deal directly with fliers, whether they sell tickets, handle reservations, search for lost baggage or make certain that unaccompanied children get safely aboard their flights. And the airline''s success, now that it has emerged from Chapter 11, is likely to depend in part on how passengers feel about the service they''ve received.

How managers boost employee morale in uncertain economic times isn''t just a problem for US Airways.

Although the Pittsburgh region appears to have fared better than many metropolitan areas in the economic slowdown, a mood of discouragement, fear and caution has gripped many companies. Highly publicized wage cuts and furloughs at US Airways have heightened the anxiety among employees in other industries, noted Audrey Murrell, an associate professor of business administration at the University of Pittsburgh.

Even in firms where there haven''t been layoffs, some companies have imposed hiring freezes as they try to cut costs and turn a profit in difficult times. In these companies, managers face the difficult task of boosting the morale of their employees while effectively asking them to work even harder.

The ability of managers to rally their employees depends, in part, on the degree of trust between the two parties. If employees feel that trust has been betrayed over the years, it is much more difficult for managers to boost morale.

That is why in uncertain economic times, it is imperative for leaders to be authentic, to communicate honestly with their employees, said Bob Rogers, president of Development Dimensions International, a Pittsburgh-based consulting firm. They must show that they empathize with the suffering and fear of their employees.

The best way to do this, Rogers said, is through eyeball to eyeball communication in small meetings -- not just through company newsletters or telephone messages. Sometimes in companies with thousands of employees, small
meetings are impossible. In that case, road shows, such as those held by Siegel, can be a good substitute.

But leaders must do more than talk. They must demonstrate by their actions that they are sharing the pain of their employees.

It is extremely hypocritical for leaders to lay off people and then accept huge bonuses. This destroys any authenticity, Rogers said.

But even if a company''s management is well intentioned, sometimes there is little that can be done to mitigate fear of layoffs, especially since job cuts often are the result of management''s bad decisions, said Carrie Leana, a business administration professor at the University of Pittsburgh.

From an employee''s point of view, There is downsizing that is harmful and downsizing that is really harmful, she said.

Leana, who did a study of downsizing in the 1980s, said employees at a firm where there are layoffs are generally willing to accept the first round of layoffs if they believe the company is well managed and is the victim of problems outside its control -- a war or economic downturn, for example.

But a second round of wage cuts and layoffs is worse. To many employees, it will appear that management didn''t know what it was doing the first time when it laid off people or asked them to sacrifice wages and benefits, she said.

Once layoffs have been made, there is a period of chaos and uncertainty for those who haven''t lost their jobs, she said.

Employees feel they have no control over their lives. They feel, ''It doesn''t matter how good or bad I am -- I may still meet the same fate as those who were laid off.

A victim mentality can slowly take over, Rogers said.

In some companies, there arises a water-cooler culture -- groups of angry and disgruntled employees gathering around the water cooler to vent their resentments, frustration and fear.

Murrell said managers who ignore the fear and resentment in times of economic uncertainty, or try to downplay its importance, are foolish to do so. You have to manage through this anxiety, not around it. The worst thing managers can say is that everything is fine. This destroys trust.

Rogers said managers must try to refocus the pain many employees feel once layoffs have occurred. Companies can do this by trying to re-recruit their remaining employees, whose loyalty and trust in the company may have been sorely
tested. Encourage employees to talk about their feelings, their careers and their future.

Rogers said leaders also must be realistic about what they can expect from workers after layoffs. Leaders are fooling themselves when they simply say, ''Let''s do more with less, Rogers said. Improving productivity is important, he said, but the pressures on employees are real.

Rogers said leaders must be willing to say, Let''s do less with less, something many are loathe to do, in part because they are under pressure themselves to produce more. Such an approach also forces managers to set priorities.

Leana, who grew up in Bellevue but left in the 1970s to study and teach elsewhere, said she kept a concerned eye on her hometown. As stories of Big
Steel''s collapse mounted in the early ''80s, she became interested in what happens to people who are laid off in industries whose better days are behind them.

Leana said her research suggested that people who experience only a moderate degree of stress after they are laid off are able to rebuild their lives much more quickly than those who are overwhelmed by the experience. They don''t grab the first job that comes along, which may pay less and be unsuited to their talents or abilities.

Murrell is completing a study on what effects demographic differences have on a person''s ability to rebound after he or she has been laid off. Murrell said there was some evidence that women and people of color have a harder time finding work that''s comparable in pay or status to the jobs they lost. She hopes to complete the study later this year.

At some companies with a hiring freeze or layoffs, management has curtailed employee training and career development programs. Murrell said this can send the wrong message to employees. It suggests that the company no longer cares about the career development of its workers -- and that the company has no future.



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