The Power of Positive Employee Relations when Making Tough Decisions

Positive Employee Relations (PERS) is a human resources principle normally discussed within a framework of developing or maintaining an engaged and productive workforce. The impact of the COVID-19 pandemic proved PERS is essential in another way. Positive employee relations can play a significant role in helping business leaders make difficult decisions without alienating the workforce and increasing labor union vulnerability.

The 2020 pandemic led to layoffs, closures, reduced production schedules, revised work schedules, and pay cuts and seriously impacted employees. Many companies learned that building trust when informing team members of these hard decisions isn’t something that can be done at the moment. Your process should begin with developing your Positive Employee Relations Strategy long before trouble brews so that employees are better able to accept tough decisions.  

Continuing to build trust when management is forced to make these tough decisions is rooted in honest communication, a willingness to accept feedback, and a commitment to do what is possible to ease the impacts. This is how companies stay union-free, even during distressing times – they leverage the power of positive employee relations. 

Positive employee relations can play a significant role in helping business leaders make difficult decisions! #toughdecisions #employeerelations #PERS Click To Tweet

When Tough Times Call for Tough Decisions 

The news is filled with stories of growing shortages. During the pandemic, disruption of supply chains led to a scarcity of medical devices, some staple drugs, and household products. There were workarounds for some shortages, but one of the shortages with ongoing widespread implications is the shortage of semiconductors and chips. These are used in computers, phones, appliances, gaming hardware, and medical equipment. The shortage is even affecting auto companies as a critical component control system for everything from digital safety systems to powertrains to entertainment systems. A single car may have more than 100 microprocessors.  

The chip shortages in the auto manufacturing industry have forced the leaders of auto companies to make tough decisions. Ford cut shifts in Kentucky for a while. Nissan canceled production on some models. Toyota reduced the production of popular models. Volvo implemented weeks of “stop days.” There are temporary plant closures too. All of these actions impacted employee lives. Most of the auto companies are unionized, but that doesn’t change the fact that employees will experience the emotional and mental stress that comes with being told they are being laid off with no idea when or if they will return to work. As of now, the chip shortage is getting worse, and the Chief Financial Officer of Stellantis, Richard Palmer, said the auto industry disruption could endure into 2022. 

In any company, the quality of the relationship management has with employees is a major factor in how people react to these difficult decisions. Union employees must refer to their union contract to give tough decisions context – but employees who enjoy the advantages of being union-free depend on their relationship with management. In a union-free environment, team members value their direct relationships and connections. They know that senior leaders, managers, and supervisors always have their best interests in mind, and their needs have been considered in the decision-making process. 

positive employee relations strategy

The Power of Positive Employee Relations 

By focusing on getting the total value of positive employee relations, your company can develop happy, loyal, productive employees with high morale who internalize the company’s values and want the company to stay union-free. Engaged employees: 

When management must make decisions around employee livelihoods, employee engagement will determine how employees respond. Tough decisions include more than layoffs, schedule reductions, and plant closures. They could lead to a reduction in payroll costs, a merger with another company impacting jobs, cost-cutting, and major revamping of jobs requiring new skills. 

Communication is Always Key

One of the key elements of PERS is communication. In its thought leadership piece, the executive search firm Cerius Executives says a year of change due to the pandemic has led to tough decisions, and four focus areas for CEOs emerged. Topping the list is maintaining workforce engagement.  

Employee communication is at the heart of employee engagement and staying union-free. The communication must be honest, transparent, and responsive. In an organization that leverages the power of positive employee relations, management has kept the workforce informed and included employees in the decision-making process. Of course, senior leaders must make the final decisions, but an essential element is how decisions are made. 

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Tough Decisions Made with Caring 

When employees believe they are mistreated and feel helpless, they are more susceptible to the promises of a union organizer. Even if management has made difficult decisions out of necessity, disgruntled employees will look for a voice. Do they believe they were never informed ahead of time? Are they telling themselves, “This is how management always treats us – keeps us in the dark?” Do they think that, if they had been consulted, could there have been alternative paths taken?  

Turnover rates can also be impacted. If employees start leaving, how does that affect the morale of the reduced workforce? Will productivity decline, unrest build, and employees look to a union to solve the problems? Making tough decisions sets the stage for unionizing unless management has established positive employee relations with the workforce. PERS is the path to staying union-free through difficult times and should be reinforced, not suspended, for the whole workforce.  

Taking advantage of the power of positive employee relations may seem impossible during difficult times, but applying the same employee engagement principles is the right path for minimizing the chances of a labor union making your company a target. 

Employee Engagement Principles 

  • Transparency: Share information and don’t withhold it out of fear employees will leave early or cease to be productive. Employees will respond best when they receive accurate and timely information about the circumstances. Unions frequently point to employers who make decisions with secrecy. 
  • Always be fair: Be sure to adhere to published Human Resources policies that employees were trained on. This is not the time for your organizational leaders to suddenly make snap decisions (thinking they’re justified) concerning actions like layoffs that employees signed on to when hired or agreed to when deciding to remain employed. When people believe their employer always treats people fairly, they will be more supportive of tough decisions. This applies to the exiting and remaining employees.  

(If already unionized, it goes without saying that adherence to the CBA agreement is critical.) 

  • Get employee feedback: No doubt, there is hesitancy to ask employees for input on tough decisions. Yet, giving employees feedback opportunities is a critical engagement strategy.  
  • Explore all alternatives: Labor law professionals advise employers to consider all alternatives, i.e., freeze on hiring, promotions, or pay raises; keeping some positions vacant; voluntary termination incentives; reducing overtime; etc. If you adhere to the principle of transparency, you will discuss the alternatives with employees. You will help them understand the options and the reasons some will not work in a particular situation. 
  • Address workload concerns: If the people retained are given additional duties, they should be compensated. Failing to pay employees for the work they do is a common trigger point for unions. 

In the article Layoffs That Don’t Break Your Company, Sandra Sucher, Harvard Business School Professor, and Shalene Gupta, Harvard Business School Research Associate, discuss at length a way to lay off employees without causing bad publicity (a labor union magnet), weakened employee engagement, higher voluntary employee turnover, and other negative consequences. Much of their advice is embraced by the PERS factors. 

The researchers point out that employees who know decisions are based on what is good for the company in terms of long-term strategic change and not just cutting costs are much more likely to understand the difficult decisions and accept them. They understand that tough decisions now could mean keeping the company and their jobs viable. A cost-cutting strategy is your right to implement as an employer. However, labor unions will quickly point out that your leaders are compensated well. Management, often say the unions, only cares about profit and not the employees directly impacted in their personal and work lives by the tough decisions. 

employee relations

Silence is Not Golden in Positive Employee Relations 

Generating the full power of positive employee relations requires quality communication. Silence is not golden in this case. Your leaders need to be proactive. If you are unsure what your communication strategy should be or where your weaknesses are, consider a deep dive Labor Relations Readiness System assessment. 

If you have an effective communication strategy in place, use it to provide staff with timely information that addresses their current specific needs. Using various formats and presenting information in different languages will help you reach all employees and lower resistance to organizational change.  

They include: 

  • Videos in which senior leaders explain the decision-making process 
  • Podcasts to keep organization leaders informed and help them lead through the transition  
  • Employee website with frequent updates 
  • Mobile apps with links to HR documents 
  • Motivational emails 
  • eLearning courses on revised workflows to accommodate a reduced workforce 
  • A FAQ communication site where employees can give and ask for feedback 
  • In-person or onsite meetings  

Employees that trust management and believe the company has their best interests at heart when tough decisions must be made are much less likely to unionize. That trust is built over time. Employees whose leaders provide excellent ongoing communication trust that organizational leaders are making the best decisions for their future and the future of the company. 

 Moving Forward with Your Positive Employee Relations Strategy

Once a tough decision is implemented, positive employee relations once again become instrumental to moving forward strategically. The remaining workforce will need a fresh round of motivation. Studies mentioned by Sucher and Gupta found that, after a layoff, the remaining employees can experience as much as a 20 percent decline in job performance, and downsizing a workforce by 1 percent leads to a voluntary turnover increase of 31 percent. Employees experience:  

  • Low morale  
  • Feelings of lost control 
  • A belief their good performance doesn’t guarantee employment 
  • Less organizational commitment 
  • Increased risk of safety violations 
  • Reduced quality of work 
  • A questioning of organizational values 
  • An examination of management’s true intent and commitment to employees 

Looking Ahead  

 Though the COVID-19 pandemic is easing, the consequences will roar on in ways like critical shortages of chips and semiconductors, forcing tough decisions for perhaps years. Leveraging the power of positive employee relations increases employee engagement, builds trust, and gives employees a voice. It’s the best way to stay union-free.  

By providing various employee communication tools and employee and leader training resources, you can build the relationships that keep your company strong. Even if you do not have to make difficult decisions now, you might have to in the future. The reality is that no one really knows for sure what the post-COVID “new normal” will be like over the next several years. 

If your workplace needs assistance developing a positive employee relations strategy, or simply needs additional resources to improve employee communication and build better relationships, Projections would love to help! Contact our team today to get started and we’ll craft a custom solution for you!

About the Author Jennifer Orechwa

With over 25 years in the industry, and now as IRI's Director of Business Development, Jennifer has gained a unique perspective on what it takes to build a culture of engagement. By blending a deep understanding of labor and employee relations with powerful digital marketing knowledge, Jennifer has helped thousands of companies achieve behavioral change at a cultural level.

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