Information is a source of power in organizations. In traditional top-down hierarchies, top managers zealously guard information as their special preserve. But the information age has forced many businesses to forge a new set of rules. Today, organizations depend more and more on knowledge workers to produce their product or service. Knowledge workers (for example, programmers, writers, educators) transform information into a product or service and need large amounts of information to do their jobs effectively. For these workers, the dissemination of information throughout the organization is critical to providing high-quality service and products to the organization’s customers.

Information dissemination involves making information available to decision makers, wherever they are located. Employees who have access to abundant information are more likely to feel empowered and are better able to participate in decision making. Information dissemination also helps managers adopt more participative leadership styles and work configurations, leading to greater employee involvement and, ultimately, to better employee relations.

The most important methods of disseminating information to employees are employee handbooks, written communications, audiovisual communications, electronic communications, meetings, retreats, and informal communications.

The employee handbook is probably the most important source of information that the HR department can provide. It sets the tone for the company’s overall employee relations philosophy,6 informing both employees and supervisors about company employment policies and procedures and communicating employees’ rights and responsibilities. The handbook lets employees know that they can expect consistent and uniform treatment on issues that affect their job or status in the company. It also tells supervisors how to evaluate, reward, and discipline their employees. It can protect supervisors and the company from making uninformed and arbitrary decisions that may hurt the workforce’s morale or lead to litigation from angry employees.

Employee handbooks cover issues such as employee benefits, performance evaluation, dress codes, employment of family members, smoking, probationary employment periods, drug-testing procedures, family leave policies, sexual harassment, discipline procedures, and safety rules.7 Handbooks need to be updated annually to reflect the current legal environment and to remain consistent with the company’s overall employee relations philosophy. Although employee handbooks are usually printed and distributed to employees, it is becoming more common for companies to put them online as electronic documents that can be updated easily. Online handbooks reduce printing costs, because employees can print only the pages they need.8

Although they are sometimes considered a tool for only large corporations, small businesses can also benefit from the use of employee handbooks. For example, a restaurant owner recently discharged an employee who did not pay for a meal, even though there was no written policy on meals and the owner had previously allowed some other employees to eat meals at the restaurant. The ex-employee took the owner to court over this misunderstanding. The owner spent over $7,000 in legal fees defending the decision to discharge the ex-employee. This dispute could have been avoided if an “employee meals” policy had been distributed in an employee handbook.9

Court decisions in some states have suggested that employee handbooks may constitute an implied contract between employer and employee that restricts the employer’s freedom to discharge employees without just cause. To avoid such restrictive interpretations by the courts, employers should include at the end of their handbook a disclaimer stating that employees can be discharged for any reason or no reason and that the handbook does not constitute an employment contract, but rather it is a set of guidelines.10 Some firms go even further to protect themselves: They ask all new employees to sign an employee handbook acknowledgment form stating they have received the handbook; will refer to it for company rules, regulations, and policies; and understand that it is in no way a contract. Not surprisingly, such forms have been controversial because the legal protection they provide the employer also tends to undermine the goodwill the handbook was designed to foster.11

Still, employee handbooks can help prevent or solve problems in the workforce. Figure 13.2 shows how a firm might communicate an enlightened nepotism policy through its employee handbook. (Nepotism is the practice of favoring relatives over others in the workplace.) The policy communicated in Figure 13.2 protects the rights of family members but balances those rights with the company’s need to avoid conflicts of interest that could affect the efficiency of its business.

In family-owned businesses in which owners often groom sons, daughters, or other family members to take over the company, nepotism is taken for granted. How much nepotism is okay? It is not uncommon for company owners to put their children in positions of power and grant them pay, titles, and privileges denied to more experienced or qualified company employees. Naturally, this antagonizes nonfamily employees. Family business consultants Craig E. Aronoff and John L. Ward recommend that family members meet the following three qualifications before making the family business a permanent career:

• ▪ Get an education appropriate for the job sought.

• ▪ Work three to five years outside the family business.

• ▪ Start in an existing, necessary job within the family business and honor precedents for pay and performance.12

Written Communications: Memos, Financial Statements, Newsletters, and Bulletin Boards

There are many other forms of written communication besides the employee handbook. Memos are useful for conveying changes in policies or procedures. For example, when there is a change in coverage of a specific type of medical procedure, the affected group of employees can be notified by written memo. In addition, the company should disseminate financial reports to make employees knowledgeable about the company’s performance. Shareholders are routinely given this information, but employees should receive it, too, because it is an important source of feedback on their aggregate performance.13 Many companies choose to distribute a triple bottom-line report that informs both shareholders and stakeholders how a company has performed on meeting its social, environmental, and financial performance goals. Social performance goals listed in a triple bottom-line report are likely to include how effective a company was at improving employee satisfaction over the previous year or a report on the state of employee wellness based on preestablished employee health goals encompassing smoking cessation, weight loss, cholesterol maintenance, and the like.14

One activity for which the HR department is likely to have direct responsibility is the production and distribution of an employee newsletter. The newsletter is usually a short monthly or quarterly publication designed to keep employees informed of important events, meetings, and transitions and to provide inspirational stories about employee and team contributions to the business.15 Newsletters help foster community spirit in a company or unit. The advent of desktop publishing packages for personal computers has made newsletter production and distribution feasible for even the smallest of companies. Some managers use a simple bulletin board to post current team performance data and comparisons with outside competitors or other teams with the company. Moreover, a common feature of a company Web site is to have an electronic bulletin board that contains announcements of interest to employees that can be posted quickly and can be viewed by all the employees regardless of their location. For example, an employee who anticipates the start of a one-year international assignment may want to post an announcement on the electronic bulletin board that he is willing to sublease his home for a year.

Audiovisual Communications

New technologies have made it possible to disseminate information that goes beyond the printed word. Teleconferencing allows people with busy schedules to participate in meetings even when they are a great distance away from the conference location (or one another). Through video cameras and other sophisticated equipment, teleconferencing makes it possible for employees at remote locations to interact with one another as if they were all seated in the same conference room. One four-hour video conference that keeps five people off an airplane and out of hotels and restaurants could save a company at least $5,000.

With teleconferencing systems ranging in price from $10,000 to $40,000, however, the costs are still prohibitive for many companies. One way companies can teleconference affordably is to rent the equipment as needed. For instance, FedEx Office rents rooms equipped with teleconferencing equipment in many of its locations.

Advances in electronic communications have made interactive communications possible even when the sender and receiver are separated by physical distance and busy schedules. With voice mail , an employee can avoid playing “telephone tag” with busy managers and instead leave a detailed voice message for them. The sender can also transmit a prerecorded voice mail message to some or all of the people within the company’s telephone network. For example, an executive can send a personalized greeting to a large group of employees. In addition, the receiver can leave different voice mail messages for different types of callers by creating a menu of messages.

Like any technology, voice mail has some drawbacks. Many people still dislike speaking to a machine. And this machine has plenty of potential for misuse. People often use it to screen calls, avoiding callers they do not want to talk to by pretending they are not there. This is fine in private life, but screening too many calls at the office can create problems. The following guidelines can help managers improve the efficiency of the voice mail system:16

• ▪ Leave a brief message Limit the length of the voice mail message to 30 seconds or less.

• ▪ Provide a timeframe for returning the call When leaving a voice mail message give the person a timeframe when you can be reached for a return call.

• ▪ Give people other options Sometimes a voice mail system gets filled with calls and it is not possible to leave a message. Give the return caller other options to reach you such as a cell phone number or an e-mail address.

• ▪ Provide a context for the voice mail message Give the listener a reason for the purpose of your call and provide a context for how the listener may know you such as the name of a mutual friend you both have in common.

Electronic mail, or e-mail , allows employees to communicate with each other via written electronic messages sent through personal computer terminals linked by a network. In addition, e-mail allows employees to offer feedback to anyone in the organization, no matter what that person’s rank. E-mail is a very fast way to convey important business results or critical events to a large number of employees.17 It also permits the sharing of large information databases among employees and even members of different organizations. E-mail has made it possible for professors at different universities worldwide to collaborate on research studies, write manuscripts, and share data as quickly as if they were working next door to each other at the same university. Interorganizational electronic communication is likely to increase significantly in the coming years, thanks to the rise of the Internet.

Another advantage of e-mail is that it allows lower-echelon employees to communicate with managers and executives when urgent information needs to be given to those who need it. For example, a functional team located on a different continent can advocate for a change in suppliers or warn of a competitive maneuver that no one in charge seems to see coming. An entire factory floor can call for the ouster of a manager who has been treating subordinates abusively and withholding performance information from key decision makers.18

Despite its many advantages, e-mail has created some problems for managers. One problem is that because e-mail is so easy to use it contributes to information overload. Some senders create large mailing lists for a document that needs to be read by only a few targeted people.

Another problem with e-mail is that mobile devices such as the smart phone and tablet PCs make it easy for managers to communicate job related e-mail messages to employees outside the office during off-hours, which can infringe upon employees’ personal time. This ease of accessibility with mobile devices can add extra hours to the workweek. A 2012 survey of 2,600 workers in the United States, United Kingdom, and South Africa sponsored by the Harvard Business Review on employee e-mail use found that 40 percent of respondents respond to work e-mail messages during non-work hours.19 The survey also found that employees spend an average of 111 workdays per year responding to e-mail.

Firms that set up e-mail systems with the idea of boosting productivity are sometimes dismayed to find that they are actually decreasing productivity. Here are some guidelines for using e-mail productively:

• ▪ Establish an e-mail improvement team to develop protocols and procedures for getting the most out of the system.

• ▪ Create electronic files for messages that need to be saved and organize them in subject folders for quick retrieval.

• ▪ Set up a common folder or electronic bulletin board to which senders can route reports and memos intended for general distribution. An electronic bulletin board can save considerable system space and time.20

• ▪ Shut off the computer beep that alerts the receiver to incoming messages to prevent constant interruptions of work.

• ▪ Assume that your e-mail from a company computer will be read by management. Use other communication channels for private or controversial messages.

• ▪ Protect sensitive documents with encryption software so that private information is not accessible to hackers or other unintended receivers.

• ▪ If you are unable to respond to an e-mail for several days, acknowledge that you have received the message and tell the sender when you are likely to answer it.21

• ▪ HR and management can develop a policy that limits off-hours e-mail work messages to specific times (for example between 8:00 a.m. and 6:00 p.m.) so that employees’ personal time is protected from intrusive requests from the office.

The thorniest problem managers confront with e-mail requires consultation with HR professionals. This is the tendency of employees to view their e-mail messages as private property, immune to employer inspection. This assumption can lead them to use e-mail to communicate about off-hours activities or to spread rumors, misinformation, and complaints throughout the organization. Some managers have been shocked to find that disgruntled employees have developed grievance Web sites that encourage workers to use e-mail to sabotage managers’ plans.22 For these reasons, employers sometimes decide to monitor their employees’ e-mail. Employees usually resent this, regarding it as an invasion of their privacy.23 A survey of 435 employers sponsored by the American Management Association found that about 62 percent of the employers exercise their legal right to monitor employees’ e-mail.24

For example, when setting up Epson America’s e-mail system, e-mail administrator Alana Shoars reassured 700 nervous Epson employees that their e-mail would be private. When Shoars found out that her supervisor was copying and reading employees’ e-mail messages, she complained—and lost her job. She filed suit, but the judge agreed with the company. Because state privacy statutes did not make specific reference to e-mail or the workplace, the judge said, the law did not protect electronic messages in the office. Epson has since notified employees that it cannot guarantee e-mail privacy, citing in part its need to protect itself from computer crime. Unless HR staff members develop e-mail policies that are explicit and reasonable, employee relations may suffer.25 A company may violate employee privacy if it captures its employees’ electronic profiles when they visit the company Web or intranet site and then sells those profiles to marketers. The marketers may in turn send unwanted marketing messages by e-mail, telephone, and junk mail to employees who match the target market profile.26

In many workplaces, e-mail reigns as the primary form of communication with colleagues, clients, and suppliers. Overdependence on e-mail can lead to misunderstandings that increase conflict and cause strained work relationships, due to the limits on e-mail’s ability to transmit emotional content between the sender and receiver. By choosing e-mail communication over face-to-face communication, the sender is deprived of the opportunity to display nonverbal information such as tone of voice, facial expressions, body posture, and eye gaze, which receivers often depend on to figure out what someone really means.27 Whenever a message has a high potential for emotional content from either the sender’s or receiver’s perspectives, it is advisable to deliver it face-to-face during a meeting or through management by walking around, both of which are discussed later in this chapter.28

An unusual approach to wean employees away from e-mail is to make rules that restrict its use. The CEO of PBD Worldwide Fulfillment Services in Alpharetta, Georgia, suspected that his 275 employees were so dependent on e-mail that it was hurting sales and productivity. So he instituted a “no e-mail on Fridays” rule that required employees to either pick up the phone or meet in person each Friday and to reduce e-mail use the rest of the time. Although this rule did not go down well with some employees, within four months the CEO noticed quick problem solving, better teamwork, and more satisfied customers following the limits placed on the use of e-mail.29

Social networking Web sites such as LinkedIn or Facebook are online services that facilitate the building of social networks among people. These Web sites allow people to interact over the Internet with each other and share text messages, photos, and video clips. Social networking sites allow employees to stay connected with current and former colleagues. Employees who join a social networking service create a public profile that identifies their current occupation, work history, interests, and activities. They also display a list of people who are in their network on their profile for others in the network to view. A person who shares a common friend with another network member can ask the friend for an introduction, which can make it easier to do business with the person of interest.

Social networking has many uses in human resource management. For example, it can be used to learn about job vacancies by sending a message to all people in a person’s network inquiring about a specific job. The social network can also be useful to an employer who is considering a person for a job. The employer can ask former colleagues who are familiar with the person about his or her work habits and what the person is like to work with as a coworker. This information is unlikely to be available in letters of recommendation. The head of global recruiting at Accenture, a multinational consulting firm, expects to identify about 40 percent of the people it will hire in the coming years with social networking tools such as LinkedIn.30

Social media, by reducing the power distance, can enable managers to form closer emotional bonds with large groups of employees. For example, Tupperware developed an internal social media community of part-time sales consultants that gave sales managers a better understanding of the reasons for costly turnover in these positions. The turnover rate was ultimately improved with the introduction of new practices based on ideas extracted from the conversations on the social media.31 The Manager’s Notebook, “Using Social Media to Build Corporate Alumni Networks,” explains how, when corporate alumni networks are in place, relationships between employees and organizations can continue and be mutually beneficial, even after an employee leaves.

MANAGER’S NOTEBOOK Using Social Media to Build Corporate Alumni Networks

Technology/Social Media

When an employee leaves an organization for a new job, the relationship between the employee and the organization does not have to end. Corporate alumni networks are social networks that companies create whose purpose is to maintain long-term relationships with valued former employees. Companies benefit from alumni networks in different ways. Former employees can recommend colleagues to fill job vacancies in highly skilled positions. They can share competitive information, effective business practices, or new industry-wide trends. Alumni employees can also provide hard-to-obtain information, for example, on the work habits of a coworker who is seeking a job at the former employer but may be a poor fit with the organization’s culture.

The application of social media technology has been an enabler to forming corporate alumni networks that allow former employees to stay in touch and learn from each other’s professional experiences. Online corporate alumni networks are likely to be password-protected, and can include message boards, blogs from executives, profiles of prominent alumni, and both internal and external job postings. LinkedIn, the social networking Web site, currently sponsors thousands of corporate alumni groups including those of 98 percent of the Fortune 500 companies. Many companies use intranets to create more personalized and secure alumni network sites. There are even informal alumni associations for companies that no longer exist such as Lehman Brothers and Arthur Andersen.

The use of corporate alumni networks is pervasive in the management consulting industry. McKinsey & Company, the renowned strategy consulting firm, has a corporate alumni network of 24,000 members including over 200 CEOs of large companies. It is not unusual for McKinsey to obtain new consulting projects from former employees who stayed in close contact with their colleagues at McKinsey. Professional services firms are also heavy users of corporate alumni networks and include Deloitte, PricewaterhouseCoopers, and Ernst & Young.

Sources:Based on Hoffman, R., Casnocha, B., and Yeh, C. (2013, June). Tours of duty: The new employer-employee compact. Harvard Business Review, 48–58; Lambert, L. (2012, September). After the breakup: The business case for corporate alumni networks. Gibbs & Soell Newsletter. www.gibbs-soell.com ; Korn, M. (2011, October 24). Boomerang employees: More companies tap into alumni networks to re-recruit best of former workers. Wall Street Journal. www.online.wsj.com ; The Economist. (2001, November 29). Corporate alumni networks. www.economist.com .▪▪

Multimedia technology —integrating voice, video, and text, all of which are encoded digitally and can be transported on fiber optic networks—make it possible to interact with video images of employees located across the country or around the world as if they were in the same room.

Multimedia technology has potential applications in many areas. One is in employee training programs (see Chapter 8). For example, pilots can develop aviation skills on a multimedia flight simulator without risking an accident to the plane. Many textbooks now offer multimedia disks that help students learn skills and apply the information they’ve learned from the text.32 These multimedia programs include voice and video clips and ask the student to make a decision from a menu of possible choices. After making a decision, the student can see the outcome on video.

Another application of multimedia technology is in telecommuting, a trend that is already changing the face of companies across the nation.33 More and more employees are working with company-equipped computer systems and faxes in their homes.34 According to a study by the Telework Research Network, the typical person who is a teleworker is 47 years old; has worked with the company for 12 years; and is likely to work in service occupations such as management consultant, salesperson, or insurance claims adjuster.35

The Manager’s Notebook, “Keys to Managing Telecommuters,” addresses the managerial implications of this new workplace development.

MANAGER’S NOTEBOOK Keys to Managing Telecommuters

Technology/Social Media

Telecommuting must be planned carefully. The following suggestions can make managing telecommuters a little easier:

• ▪ Select telecommuters with care, considering the work habits of the employee and the type of work involved. People who are not very self-motivated may not be able to manage their time well at home.

• ▪ Maintain schedules and make sure telecommuters stick to deadlines. Although it is okay for telecommuters to work off-hours, they should be available for consultation when the company needs them.

• ▪ It is recommended that a telecommuter should make regular phone or e-mail status reports so that colleagues can observe the progress being made by the telecommuter.

• ▪ Make sure the technology works. Without the right compatibility between employers’ and telecommuters’ computer systems, there will be delays in communication and traffic tie-ups on the electronic highway.

• ▪ Have home-based workers come in to the office on a regular basis so they can attend meetings and interact with managers. Doing so not only keeps these employees in the flow but also helps combat their feelings of isolation.

• ▪ Develop a carefully crafted telecommuters plan that includes performance expectations with measurable results. Managers of telecommuters must develop new skills and learn to transition from managing with a focus on employees’ behaviors and time to one with an emphasis on managing by results.

• ▪ Don’t make telecommuting a term of employment. State in the plan that the company can require changes to telecommuting based on business needs.

Sources:Based on Elsbach, K., and Cable, D. (2012, Summer). Why showing your face at work matters, MIT Sloan Management Review, 10–12; HR Focus. (2008, April). Planning enhances the potential of telecommuting success, 51–54; Fisher, A. (2005, May 30). How telecommuters can stay connected. Fortune, 142; HR Focus. (2002, May). Time to take another look at telecommuting, 6–7.▪▪

Retreats

A retreat is an extended meeting in which the company takes employees to a relaxing location, such as a mountain lodge or a seaside resort, where they mix business with recreational activities, such as golf, tennis, or sailing. Some retreats are designed to develop creative ideas for long-term planning or for implementing changes in business practices. Others, such as the outdoor adventures organized by Outward Bound, encourage employees to develop interpersonal skills by involving them in such activities as mountain climbing or whitewater rafting, where they are forced to be interdependent. These intense shared experiences can foster mutual appreciation among coworkers.41 A retreat can also be an excellent way of improving employee relations. For example, one medium-sized law firm in the Denver area used a retreat to improve relations between partners and associates. All the firm’s members spent two days at a mountain lodge talking in small groups about ways to improve their relationships with one another. These discussions brought into the open many touchy issues that had been simmering. In the retreat setting, the firm’s members could deal with them constructively.

Many family businesses are discovering the value of retreats. Two brothers, Steve and Elliott Dean, bought all the stock in their father’s company, Dean Lumber Company in Gilmer, Texas. Three years later Steve realized that he had been so busy with day-to-day affairs that he had not spoken with family members about his plans for the company’s future. The solution: a family retreat at which all 15 members of the Dean clan gathered for two days to discuss Steve’s vision for Dean Lumber, helped by a facilitator from the Family Business Institute at Baylor University in Waco, Texas. The retreat, which included facilities with meals, the facilitator, and guest speakers, cost the Deans $5,000.

Most family business consultants recommend using a nonfamily facilitator at the first retreat, to get the process going and keep emotions from running too high. Later on the role of facilitator can be rotated among family members. To help the Dean family get a grip on the issue of succession, for example, the facilitator asked the group to pretend that Steve and Elliott had been killed in a plane crash and asked what they would do. This proved a shocking exercise for the brothers because it made them realize how very little short- or long-term planning they had done.42 In addition to using retreats to air important issues, many family businesses use them to set up a family council, an organizational and strategic planning group whose members regularly meet to decide values, policy, and direction.43

Informal Communications

Sometimes called the “grapevine,” informal communications consist of information exchanges without a planned agenda that occur informally among employees. Many informal communications take place among employees who form friendships or networks of mutual assistance at the water fountain or in the hallway, company cafeteria, offices, or parking lot. Informal communications pass along information that is usually not available through more formal communication channels—for example, the size of upcoming merit pay increases, who is in line for a big promotion, who has received an outside job offer, and who has gotten a low performance evaluation and is upset about it.

Informal communications can be the source of creative ideas. Qwest, a regional telecommunications company that is now part of CenturyLink, designed a new research facility to take advantage of the benefits of informal communication. The architect designed “breakout rooms” and hallways to optimize spontaneous interactions between technicians and scientists so that informal groups could brainstorm together to solve technical problems and generate ideas.

Managers and HR staff need to be aware of informal social groups among employees called cliques, which may disrupt the flow of information among employees by excluding those who are not part of the clique. Cliques often form among employees who are similar to each other, which results in the exclusion of those who are different on factors such as age, race, gender, or ethnicity. In one case, a top executive at Adams-Blake, a California software firm, noticed that within one of the company’s software development teams, a clique had formed that prevented two team members from obtaining information from those on the team who were part of the clique. Team performance was negatively affected by the social tension between the clique and the excluded employees. The executive was able to improve team performance in the short run by threatening to discharge anyone in the clique who withheld information.44 Better ways to deal with some of the harmful effects of cliques over the long term include rotating team members between different projects, allowing employees to form working relationships with diverse members of the organization. Company-sponsored social events also open new channels of communication so that more information is shared, thus reducing some of the harmful effects of cliques.

When organizations allow too much information to be communicated informally, there is a good chance that it will be distorted by rumor, gossip, and innuendo. The result may be poor employee morale and poor employee relations. To guard against this, the HR department and managers need to monitor informal communications and, when necessary, clarify them through more formal channels. One effective way to monitor informal communications is through management by walking around (MBWA) . MBWA, championed by Tom Peters and Robert Waterman in their wildly successful book In Search of Excellence, is a management technique in which the manager walks around the company so that employees at all levels have an opportunity to offer suggestions or voice grievances. This management style is used to build rapport with employees and monitor morale at IBM and many other companies.45 Management behavior in the workplace can communicate trustworthiness to other employees. The Manager’s Notebook, “Managerial Behaviors That Promote Interpersonal Trust,” offers tips on behavior that communicates and builds trust with others.

MANAGER’S NOTEBOOK Managerial Behaviors That Promote Interpersonal Trust

Ethics/Social Responsibility

The way managers behave in the workplace communicates their trustworthiness to other employees. Here are some examples of trustworthy behaviors that managers can engage in to build trust with others:

• ▪ Act with discretion and keep secrets Keeping a secret means not exposing another employee’s vulnerability. Divulging a confidence makes a person seem malevolent and unprofessional.

• ▪ Be consistent between word and deed People who don’t say one thing and do another are perceived as being caring about others (i.e., they do not mislead) and being competent enough to follow through. Managers should set realistic expectations when committing to do something, and then deliver.

• ▪ Engage in collaborative communication People are more willing to trust someone who shows a willingness to listen and share, to get involved, and talk things through. In contrast, people are wary of someone who seems closed and will only answer clear-cut questions or discuss complete solutions. Thus, it is important for managers to be willing to work with people to improve on their partially formed ideas.

• ▪ Ensure that decisions are fair and transparent People take their cues from the larger environment. As a result, the way management treats other people influences the way employees treat each other. Therefore, fair and transparent decisions, in which the decision process and outcomes are revealed to all, can translate into a more trusting environment for all employees.

• ▪ Demonstrate loyalty to other employees A good way a manager can show loyalty to employees is by acknowledging their contributions and giving them credit for successful results. By sharing credit with employees, a manager supports a more trusting environment where people feel free to share ideas with each other, which can lead to an increase in workplace innovations.

Sources:Based on Abrams, L., Cross, R., Lesser, E., and Levin, D. (2003, November). Nurturing interpersonal trust in knowledge-sharing networks. Academy of Management Executive, 67; Covey, S. M. R. (2006). The speed of trust. New York: Free Press; Sutton, R. (2010). Good boss, bad boss. New York: Business Plus.▪▪

Gossip may sometimes be helpful to people in organizations, which means that managers should use discretion when attempting to discourage employees from exchanging gossip. Research shows that employees derive some benefits from gossip. They can learn which employees are likely to be free riders, which bosses are bullies, and which employees are difficult to work with. This is valuable information that people need to know when taking on new work assignments or bringing new members into a high-performing team, and it may not be available through other, more formal channels of communication.46

To provide upward communications channels between employees and management, many organizations offer employee feedback programs . These programs are designed to improve management–employee relations by (1) giving employees a voice in decision making and policy formulation and (2) making sure that employees receive due process on any complaints they lodge against managers. The HR department not only designs and maintains employee feedback programs, but is also expected to protect employee confidentiality in dealing with sensitive personal issues. HR personnel are also charged with ensuring that subordinates are not subject to retaliation from angry managers.

The most common employee feedback programs are employee attitude surveys, appeals procedures, and employee assistance programs. Here we discuss the first two kinds of programs, which are intended to resolve work-related problems. We discuss employee assistance programs (EAPs), which are designed to help employees resolve personal problems that are interfering with their job performance, later in this chapter.

Employee Attitude Surveys

Designed to measure workers’ likes and dislikes of various aspects of their jobs, employee attitude surveys are typically formal and anonymous. They ask employees how they feel about the work they do, their supervisor, their work environment, their opportunities for advancement, the quality of the training they received, the company’s treatment of women and minorities, and the fairness of the company’s pay policies. The survey responses of various subgroups can be compared to those of the total employee population to help managers identify units or departments that are experiencing poor employee relations.

Making specific improvements in employee relations can avert acts of sabotage or labor unrest (such as strikes, absenteeism, and turnover) that are directly attributable to strains between subordinates and managers. For example, in analyzing attitude survey data, a chain of retail stores in the Midwest found that employees at one store had much lower levels of satisfaction than the employees at any other store in the chain. The chain’s top managers immediately realized this was the same store that had experienced several serious acts of sabotage. Instead of retaliating against employees, corporate management set out to solve the store’s supervision problems with training and mediation.

To manage an employee attitude survey effectively, managers should follow three rules: First, they should tell employees what they plan to do with the information they collect and then inform them about the results of the survey. There is no point in surveying opinions unless the firm intends to act on them. Second, managers should use survey data ethically to monitor the state of employee relations, both throughout the company and within employee subgroups (such as women, accountants, or newly hired workers), and to make positive changes in the workplace. They should not use the information they collect to fire someone (for example, a supervisor whose workers are unhappy) or to take away privileges. Finally, to protect employee confidentiality and maintain the integrity of the data, the survey should be done by a third party, such as a consulting firm.

The application of the Internet with custom-designed software provides employee attitude survey feedback on a just-in-time basis. For example, eePulse, an Ann Arbor, Michigan, company, produces weekly reports of employee job satisfaction and other work attitude measures for its clients based on taking the pulse of various employee subgroups with an e-mail survey. The Web-based attitude survey lets managers identify the factors that cause declines in employee satisfaction more rapidly than is possible with traditional paper-and-pencil surveys.47

Best Buy, a retail chain, allows employees to share and discuss their ideas and experiences on an employee-run intranet called Blue Shirt Nation. Employees can offer advice for tackling job-related problems or candid feedback on what they think about specific company programs. The benefit to management from unfiltered information from employees is that they learn what employees really think about company programs and they can identify best practices that employees truly value. For example, Blue Shirt Nation ran a contest in which employees submitted videos they had conceived and produced to improve employee adoption of 401(k) retirement plans. The result was a 30-percent increase in plan enrollment.48

In which countries are workers the most satisfied with their jobs and their employers? According to a survey, Swiss workers are the happiest, whereas Japanese workers are the least happy. The United States falls in the middle range—at about the same level as Germany and Sweden, two countries known for their enlightened approaches to management.49 Experts in employee relations recommend several practices that can enhance employee satisfaction and happiness in the workplace: (1) provide fair treatment, security, and recognition of employees; (2) select employees for fit in the organization as well as the job; and (3) ensure that competent leadership is provided at all levels of an organization.50

Appeals Procedures

Providing a mechanism, an appeals procedure , for employees to voice their reactions to management practices and challenge management decisions enhances employees’ perception that the organization has fair employment policies. Organizations without an effective set of appeals procedures increase their risk of litigation, costly legal fees, and back-pay penalties to employees who use the courts to obtain justice.51 Effective appeals procedures give individual employees some control over the decisions that affect them and help to identify managers who are ineffective or unfair.

Some of the most common management actions appealed by employees are:

• ▪ The allocation of overtime work

• ▪ Warnings for safety rule violations

• ▪ The size of merit pay increases

• ▪ The specification of job duties

• ▪ The employer’s reimbursement for medical expense claims filed by employees

• ▪ Performance evaluations

Managers may choose from several different types of appeals procedures that vary in formality.52 The most informal is an open-door program. Although the specifics of open-door programs vary from company to company, the common theme is that all employees have direct access to any manager or executive in the organization. IBM’s open-door policy has been much admired. An IBM employee can walk into the office of any manager, up to and including the CEO, and ask for an opinion on a complaint or any other problem worrying the employee. The manager consulted must conduct a fair investigation into both sides of the issue and provide an answer within a specified period of time. For example, an employee who is dissatisfied with his or her performance evaluation may seek a second opinion from another manager. The open-door policy has two major benefits: It makes employees feel more secure and committed to IBM, and it makes managers less likely to act arbitrarily.

Like the open-door policy, a speak-up program is informal and flexible. It differs in that it prescribes specific steps for the employee to take in bringing a work problem to management’s attention. CIGNA, a financial services and insurance company, has a speak-up program called Speak Easy that guarantees employees access to higher levels of management, but only after they bring their problems to the attention of their immediate supervisor.

Companies use hotlines as a way to enable employees to report complaints anonymously and confidentially through a neutral third party. Workers can call a toll-free number, available around the clock, and talk to a trained interviewer, who routes a written summary of the complaint to the employer. Callers get a case number so they can check on the status of a complaint later. The number of employers providing telephone hotlines has increased since the passage of the Sarbanes-Oxley Act of 2002, which requires publicly traded companies to have a confidential, anonymous mechanism for employees to report suspect accounting matters. Some companies use hotlines for a wider set of issues than as a compliance tool to report fraud or ethics violations. Cabela’s, an outdoor-outfitter chain based in Sidney, Nebraska, uses hotlines to measure the satisfaction of its workforce. Cabela’s hotline vendor responds to calls within 48 hours of notification.53

An ombudsman is a neutral person whose role is to handle employee complaints by mediating between the parties who are in a dispute. Employees may lodge concerns anonymously to an ombudsman without fear of retaliation. General Electric uses an ombudsman system as a communication channel to give its employees a voice so they can anonymously report activities that can compromise the company’s integrity or ethics. Depending on the nature of the problem, the ombudsman may attempt to mediate it or refer concerns to financial, legal, or HR staffs for investigation.54

The grievance panel and the union grievance procedure are the most formal mechanisms used by organizations to handle employee complaints. Grievance panels are used in nonunion firms. They are composed of the complaining employee’s peers and managers other than the employee’s direct manager. The grievance panel conducts an investigation into the grievance brought before it. Grievance panels are typically the last step in the appeal process. For example, Honeywell’s grievance panel, called the Management Appeals Committee, is asked to resolve a grievance only if solutions have not been found at earlier steps involving, first, the employee’s supervisor and, second, an employee relations representative.

The union grievance procedure is the appeals procedure used by all employees working under a union contract. Like the grievance panel procedure, it entails multiple steps leading to a final and binding decision made by a neutral decision maker called an arbitrator. The union grievance procedure is an important feature of labor contracts, and we explain it in greater detail in Chapter 15 .

Organizations should use a mix of appeals procedures. For instance, a company might implement an open-door policy to deal with fairly simple problems that can be resolved quickly (such as determining whether an employee violated a safety rule). Next, it might institute an employee assistance program to deal with sensitive problems that involve an employee’s privacy (such as a terminal illness). Finally, it might set up a grievance panel to examine complex problems affecting employee relations within a group or organizational unit (such as the definition of a fair production quality standard).

Employee assistance programs (EAPs) help employees cope with personal problems that are interfering with their job performance. These problems may include alcohol or drug abuse, domestic violence, elder care, AIDS and other diseases, eating disorders, and compulsive gambling.55 Organizations with EAPs publicize the programs to employees and assure them that their problems will be handled confidentially. When an employee’s personal problem interferes with job performance, the individual is considered a troubled employee. 56 In a typical company, about 10 percent of the total employee population at any given time is troubled.

Figure 13.3 shows some of the symptoms of a troubled employee. A troubled employee generally behaves inconsistently in terms of attendance, quality of work, attention to detail, and concern for personal appearance.57 A great deal of the person’s energy is devoted to coping with a personal crisis that he or she may want to keep secret from the company. Until this personal problem is resolved, the employee will be in emotional and/or physical pain and the company will be deprived of the full benefit of his or her skills. It is, therefore, in the interests of both the troubled employee and the employer to resolve the problem.

An EAP involves four steps (Figure 13.4):

1. The first step is identifying troubled employees and referring them for counseling. About half of all referrals are self-referrals by employees who realize they are in a crisis and need help, but want to keep their problem confidential. The other half are made by supervisors who observe some of the symptoms of a troubled employee. When job performance is deficient, the EAP referral is usually linked to the company’s discipline procedure—it may be the last step taken before the employee is dismissed. Employees have the right to refuse to participate in the EAP, but refusal may mean termination if the problem has a significant negative impact on their work. In fact, though, many employees appreciate the company’s willingness to help them through EAP counseling.

2. The second step after referral is a visit with an EAP counselor, who interviews the employee to help identify the problem. In the case of a complex personal problem such as alcohol abuse, employees may strongly deny having a problem. The counselor, however, is trained to identify the problem and arrange for treatment. The location of an EAP can be at an on-site facility, with counselors available on the company premises, or an off-site facility. Offsite EAP facilities can provide counseling services to employees by the use of an 800 telephone line with counselors on call on a 24-hour per day basis. However, because EAPs are driven by relationships between counselors and employees, a recent survey by consulting firm EAP Support Systems found that overall use of off-site EAP programs was one-third less than that of on-site EAP programs.58

3. The third step is to solve the problem. Sometimes the EAP counselor is able to help the employee do this in a short time (three sessions or fewer). For example, an employee in financial difficulty may need only short-term counseling in how to manage personal finances. Some problems, however, take longer to resolve. For these, the EAP counselor will send the troubled employee to an outside agency equipped to provide the necessary treatment. The counselor will try to find a service that best fits the employee’s needs and is also cost-effective. For example, an EAP counselor who determines that an employee needs treatment for alcoholism must decide whether the employee should receive inpatient residential treatment, receive outpatient treatment, or attend Alcoholics Anonymous (AA) meetings.59 Inpatient residential treatment may require a 30-day hospitalization period that costs between $8,000 and $12,000. The other two alternatives cost much less.

4. The fourth and final step depends on the outcome of the treatment. If the employee has been placed on leave and the treatment is successful, the employee is allowed to return to work. In some cases, treatment does not require the employee to take a leave of absence; the employee remains on the job while being treated and continues after treatment has been successfully concluded. If the treatment is unsuccessful and the difficulty continues to disrupt the employee’s work performance, the employer usually terminates the employee.

EAPs can help employees suffering from anxiety and stress due to restructurings or downsizings. The EAP at Rohm & Haas, a specialty chemical company headquartered in Philadelphia, played an important role in easing the effects of downsizing the company’s production facility. When employment was cut from 800 to about 550, the company negotiated with its EAP vendor for an on-site psychologist who, in addition to maintaining office hours at the plant, sat in on management meetings and walked around the plant talking to employees. At GTE, EAPs are used to identify and provide support for managers who are dealing with people who are being let go or transferred.60

In the United States, there are more than 12,000 EAPs; 74 percent of large companies use them61 to deal with a wide variety of problems. Gambling casinos in the Atlantic City, New Jersey, area have used EAPs to deal with the high incidence of alcohol- and drug-related performance problems that employees in the gambling industry experience. The EAP for the Association of Flight Attendants, which represents flight attendants from 19 airlines, has an unusually large number of individuals seeking help with weight loss.62 At Harmon International Industries, a California manufacturing firm, the EAP for the company developed some special programs to help Harmon’s employees deal with domestic violence, a problem that costs U.S. industry $700 million in lost productivity a year, according to the Family Violence Prevention Fund. The EAP provided awareness training to managers to show them how to detect warning signs of domestic violence and how to make referrals to the EAP counselor. The EAP helped one of Harmon’s employees who reported domestic violence, Martha Rodriguez, to obtain a restraining order and obtain psychiatric care for her husband, herself, and her children.63

EAPs contribute to effective employee relations because they represent a good-faith attempt by management to support and retain employees who might otherwise be dismissed because of poor performance. The annual cost per employee of an EAP runs about $20 to $30.64 However, employers gain financial benefits that outweigh their out-of-pocket EAP expenses in terms of savings on employee turnover, absenteeism, medical costs, unemployment insurance rates, workers’ compensation rates, accident costs, and disability insurance costs. One study showed that the rate of problem resolution for EAPs is about 78 percent.65 PricewaterhouseCoopers consultants estimate that each dollar invested in an EAP could return four to seven times that amount in cost reductions.66

An alternative to EAPs for the purpose of helping employees cope with personal problems is the growing use of workplace chaplains, who are usually ordained ministers that provide counselling services to employees. Workplace chaplains are proactive and do outreach with employees rather than waiting for complaints to be reported to the EAP, which are likely to occur on a telephone hotline. Employers receive written reports from a workplace chaplain on a regular basis that will reveal the patterns of problems that are troubling to employees. Companies that use workplace chaplains include R. J. Reynolds Tobacco, McDonald’s, and Tyson Foods. Marketplace Chaplains is a company that supplies workplace chaplains to businesses, and currently employs 2,700 of them.67