Management and Ethics

[Japher]

In my studies I keep seeing the same dilemma come up and the same solution presented, and it really bugs me. The students in HR all support it, but then I don't have much respect for HR as they are generally nothing more than cya policies for upper management. The problem arises with the hypothetical situation of a pending layoff or selling of a branch, managers and/or director level personnel are informed of this but are told not to let any of the reports know. Then, you get a story about how one of the managers/directors overhears one of his/her employees talking about how they want to start a family or buy a house or take an expensive vacation, and since they can't say anything they don't. This bugs me, morally and ethically.

Having been kept in the dark by my company about my pending layoff, having made decisions based on continual employment, and then having the rug yanked out from under me, and knowing that my decision would have been different had I been privy to all information it really bugs me.

The justification given in support of this behavior is based on Utilitarianism and Free Market ethics; management is responsible for protecting the shareholders interests in maintain profit, it is for the greater good that those affected not know until it is deemed necessary by management. Bull****.

If you are going to leave your company it is customary and sometimes contractual that you give your company 2 weeks notice, however the company need not give you any notice? In fact, I would argue that the company should give you even more notice since you are probably more reliant on them then they are on you. It's not like a company goes broke over night or finds a buyer for a branch the minute they start shopping. What many companies do that lead to layoffs or firings are undermining to the well-being of and deceitful to their employees.

This just really pisses me off, and to see an ethics course defend this, especially at a Jesuit college, really chops my hide. It really reflects upon the poor state of the corporate atmosphere, lends well to the rise of corruption we are seeing in business, and surly costs companies in the lack of loyalty they are able to receive from their employees because they request trust they will not show.

What do you think? Am I way off base here? Should companies openly lie or avoid telling their employees things that will personally effect them?

[Zkribbler]

I'm still trying to figure out the justification. Somehow the stockholders will suffer if certain employees learn that they are going to be laid off??

I guess it's an employee morale thing. Management believes that, by withholding this critical information from their employees, by lying to them, and by letting them make uninformed, finacially suicidal decisions, morale will be improved.

Several decades ago, (I believe it was) Lockheed took an interesting approach to pending lay offs. Management went in and informed the employees in one section that it was necessary to lay off about 2/3 of them. They were told to take the day and discuss it among themselves. The employees were given the task of deciding who would stay and who would leave. They did, in a most adult manner. By the end of the day, heads of families who were behind the financial eight ball kept their jobs, while single people and those who were well off volunteered to be laid off, so their less fortunate co-workers could stay on.

The current mantra of management seems to be to screw the employees in every way possible at every opportunity. My personal philosophy is that, if you treat employees with respect and honesty, they will give you the same return, only 1,000 times over.

As a moral matter: Lies are wrong.
As a practical matter: Lies are counter productive.

[rah]

It depends on the circumstances. If the company has a policy for serverance pay then they have the responsibilities to their shareholders to conceal the truth from employees. So your arguement that you give 2 weeks notice is moot.

We had a situation were we were laying off one of our computer operators. We scheduled it with HR for 5 O'clock so we could remove all of his access at 5:01. Unfortunately our HR rep decided that he wanted to leave early and rescheduled the meeting for 4 and didn't tell us. The employee was told at 4 and to spite us he returned to the computer room and spent 30 minutes deleting files and a few other malicious things. While we did have backups we had to bring our call centers down for a few hours to recover. This cost our company 10's of thousands of dollars in lost productivity. We were also burned by a consultant who due to someone's slip of the tongue knew he was being let go a few hours prior and went in and modified some code so it wouldn't work right. It took us a while to figure that one out.

So when layoffs are concerned yes, the company has no obligation to inform employees prior as long as there is a satisfactory serverance policy.

Of course, after saying that, there have been occasions where I knew the company would not be at risk and informed a couple of employees prior, but you'd better be damn sure of that since you will be held accountable.
Fortunately I've never been burned that way.

[Japher]

I'm still trying to figure out the justification. Somehow the stockholders will suffer if certain employees learn that they are going to be laid off??

In the issue of selling off say a sales division they believe that by not telling the employees they will go about business as usual and this will help them get the best price for the division. Employees, knowing of potential downsizing or layoffs, might drag their feet, take vacations, or just look for another job and jump ship. This would be very bad for the company, especially if they decide not to sell after all.

IMO, if you build a company that is loyal to the employees and want to explore selling that branch then they might actually work harder to make the division look better. Additionally, the company should feel some loyalty back to the employees and do whatever they can to ensure that those in the division retain their jobs or similar jobs.

[Grandpa Troll]

I can tell you from several high level buyouts I have been involved in, you are bound by a Non Disclosure Act and thus would face legal issues with such proposed business transactions being extended outside a need to know circle.

Often these do not come to fruition and are based upon other criteria before being implemented as final.

It is bad but thats business when you work for a company, not just individuals but laws governing what can and cant be discussed.

Stock Splits are one that comes to mind, a company is selling out and the stock owned is going to pay major dividends. Stock Watch sees something fishy, an owner decides he really likes an employee and advises him/her to buy a large investment, thats just as illegal.

But thats life and it often sucks.

Grandpa Troll

[Grandpa Troll]

It depends on the circumstances. If the company has a policy for serverance pay then they have the responsibilities to their shareholders to conceal the truth from employees. So your arguement that you give 2 weeks notice is moot.

We had a situation were we were laying off one of our computer operators. We scheduled it with HR for 5 O'clock so we could remove all of his access at 5:01. Unfortunately our HR rep decided that he wanted to leave early and rescheduled the meeting for 4 and didn't tell us. The employee was told at 4 and to spite us he returned to the computer room and spent 30 minutes deleting files and a few other malicious things. While we did have backups we had to bring our call centers down for a few hours to recover. This cost our company 10's of thousands of dollars in lost productivity. We were also burned by a consultant who due to someone's slip of the tongue knew he was being let go a few hours prior and went in and modified some code so it wouldn't work right. It took us a while to figure that one out.

So when layoffs are concerned yes, the company has no obligation to inform employees prior as long as there is a satisfactory serverance policy.

Of course, after saying that, there have been occasions where I knew the company would not be at risk and informed a couple of employees prior, but you'd better be damn sure of that since you will be held accountable.
Fortunately I've never been burned that way.

This happens more often than not, behind the scenes.

This is a shame but a company needs to protect itself.

Great points rah

[rah]

And to highlight the seriousness of the situation, the HR rep was terminated the next day.

[MikeH]

Wait, they can lay you off with no notice and no redundancy pay?

That's terrible. Socialism FTW.

[rah]

In the computer operater situation, he was given 8 weeks pay (employed for 4 years so 2 weeks for each year). WHICH we still paid him despite his actions. (better than he deserved)
For the consultant, nada, well, because he was a consultant. His hiring company is responsible for those types of things.

[MikeH]

I think even here you could legitimately fire him for that, and as he'd still technically employed until he served his notice period (probably at home). And then you wouldn't have to pay him redundancy either.

[rah]

We could have fought it, but being part of a big company means you usually lose since the board always sees it as little guy vs big evil company.

We lost almost every time. We had one phone rep who threatened one of our customers saying that he would kill him. (yes our HR department is useless screening the mentally imbalanced) We had the conversation recorded and still lost that one and had to pay serverance. Really what does it take. But we kept fighting them and kept losing, even when we had confessions. I can understand why they like to error on the side of the little guy, but it really got ridiculous.

[Japher]

You are speaking about firing with cause, the guy definitely had to go. I am speaking about situations where business decisions prompt "re-engineering". If a company is concerned about sabotage then they are running their business pretty poorly, IMO. If a company is doing bad or planning a restructuring should they not inform their employees?

[rah]

For cause or layoff, you're still talking about terminating the employee. That can generate bad feelings regardless of the reason. A company must protect itself. OF course as I stated, there is some judgement possible but only in one on one situations. For a group, all it takes is one bad apple, and based on experience there is usually at least one bad apple. If you tell one employee it's not a secret anymore and others will learn.

Just because you have a wack job does not mean you're running a business poorly. I have no problem telling employees that the company is doing poorly and they might want to keep an eye open for other opportunities. But telling employees that the company is doing poorly is usually code for no or little raises and forget about your bonuses. In big companies it's a problem because upper management usually likes to blow smoke up your ass to help morale, but when it comes to rewards, the story changes. This is piss poor management because in the end, nobody will believe anything since they've been lied to so often.

I'm from the old school of management where truth an integrity is more important, but as a manager there will always be circumstances where you have to lie. Smart employees will recognize those circumstances and be forgiving if you've treated them fairly over the years.

[Jon Miller]

Sounds like a terrible guy in the first place.
JM

[MikeH]

Who believes these stories are really about "people Rah worked with"?