Automakers' Hearing a Missed Opportunity to Share with Employees the Risks of Doing Business

Thursday, November 20, 2008 by Mark Harbeke

I thought the most telling moment of yesterday's Capitol Hill hearing between chief executives of the "Big Three" U.S. automakers – Richard Wagoner of General Motors, Robert Nardelli of Chrysler and Alan Mulally of Ford – and the House Financial Services Committee occurred when commitee member Brad Sherman (D-CA) asked for a show of hands from the three business leaders indicating they flew commercial to Washington, and planned on selling their private company jets afterward and flying commercial back to their headquarters.

Check out this video to see their reaction (about a minute in).

As The Washington Post's Dana Milbank noted today, this was grandstanding by Sherman and the committee, to be sure.  Yet the incident, along with other recent big business aid requests that have been soured by their own controversial, big-ticket purchases (I'm looking at you, AIG) brings to the fore once again that, at many large firms, the front-line employees take most of the risks when times are bad – reduced or cut pensions, slimmed-down shifts, threat of layoffs – but share in few or none of the rewards, whether times are great or tough.

Due to their size, changing market conditions, and most importantly their leadership philosophy, the small and midsize organizations we've honored over the years for their productive employee engagement and team building strategies tend to operate much differently.  As we discovered as a theme among our 2008 Top Small Workplaces, in trying to build sustainable workplace cultures that will lead to bottom-line sustainability, these enterprises use policies and practices that set their employees up to share in both the risks and the rewards.

A JA Frate mechanicWhat has this meant on the risk side, when the economy and/or their markets have presented challenges?  2008 winner JA Frate, a trucking company in Illinois, and 2007 winner Corporate Ink, a Boston-based PR firm for the tech industry, both faced the loss of key clients in recent years.  In both cases, leadership opened a frank dialogue with employees, the consensus result of which were all staff, including the CEO, taking a temporary pay cut until conditions improved.  Also in both cases, during the darkest days leaders and managers worked closely with employees on cost cutting, improving processes, increasing the satisfaction of their remaining clients, and identifying new clients.

Business eventually improved for both firms, which have emerged stronger for their experiences partly because of the workplace team building that was fostered.  "They really stand behind you," a JA Frate employee who went through their ordeal told us.  "They're not just making a dollar, they're helping the employee."

When times are good, what are some measures that Top Small Workplaces use to reward employees for their contributions?  The most typical performance-based incentives include profit sharing, bonuses, sales commissions, and stock options.

So remember this tip from our 2008 Top Small Workplaces Benchmarking and Best Practices Report when reviewing your employee engagement activities: Giving employees a stake in the outcome provides a focus on key goals and priorities, and it also breeds an employee ownership attitude.

You can take that to Washington, Big Three.

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Comments for Automakers' Hearing a Missed Opportunity to Share with Employees the Risks of Doing Business

Monday, November 24, 2008 by Marnie Reed:
When management does not share information it makes me think they are trying to hide something. What are they trying to hide? The state of our company? If the company is doing well why hide it? If they company is doing poorly why hide that either? As an employee, one who cares about my job and my company, I want to feel like I know what is going on -- good, bad or ugly. Marnie R.

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