Why Do Supervisors “Speak No Evil” to Employees in the Financial Crisis?
In March, 694,000 additional Americans lost their jobs—bringing the total number of unemployed to 13.2 million. According to the United States Department of Labor (2009), half the increase in the unemployment rate occurred in the last four months. Even individuals who retain their jobs are not immune to the influence of the financial crisis. In an effort to save money, cash-strapped companies often cut employee pay and reduce working hours (Kiviat, 2009).
Understandably, workers are fearful about how the financial crisis will influence their jobs. In a national survey of American employees, about 62% said they expect their organizations will have difficulty meeting performance objectives in 2009; and 70% believe economic issues will cause financial problems for their companies. The vast majority of employees (71%) said their companies’ leadership should proactively communicate about the current economic problems. Yet 54% of surveyed workers reported their bosses have said nothing about how the financial crisis will affect their companies (Weber Shandwick, 2008).
With the United States facing “one of the most turbulent times in American history” (Pepicello, 2008), it is unclear why its business leaders choose to “speak no evil” to employees about the implications of the financial crisis.
Study to Focus on Crisis Communication
In an effort to learn how supervisors from various industries are communicating with their employees, the University of Phoenix National Research Center (NRC) awarded a 2009 research grant to investigate leadership communication during the financial crisis. In the grant proposal, I along with Dr. Richard S. Schuttler, also a School of Advanced Studies (SAS) faculty member, argued that the magnitude and timing of the financial crisis presented a limited window of opportunity to study the leadership process (NRC, 2009).
The six-month research project was scheduled to begin with online data collection in May. The project, Crisis Communication: A mixed methods study of supervisor leadership and employee performance during the 2008-2009 financial crisis, will ask employees to share thoughts about how effectively (if at all) supervisors are communicating about the impact of the financial crisis. “The economic and personal consequences of the crisis demonstrate how leaders must be prepared to cope with variables outside their control as well as communicate unexpected policy and vision changes to stakeholders,” Dr. Schuttler said.
The NRC study will research the correlation between supervisors’ communications and employees’ perceptions about the financial crisis, particularly as it relates to:
- Job stability
- Benefits (401K, pension, stock options, etc.)
- Profitability of the organization
- Securing financing/loans
- Paying bills/meeting payroll
An advisory council composed of subject matter experts from a variety of industries will assist me and Dr. Schuttler. Dr. Tom Box (Pittsburg State University), Dr. Carolyn DeLeon (SAS alumni), Dr. Jimmie Flores (SAS alumni), Dr. Judith B. Kaplan (University of Phoenix School of Business faculty member and SAS alumni), Francisco Melero and Tim Taylor (doctoral learners) are members of the study’s advisory council.
For more information about this study please contact me at DrRuby@SLCI.ws or Dr. Schuttler at DrRich@SLCI.ws.
Kiviat, B. (2009, April 16). When companies opt for pay cuts instead of layoffs. Time. Retrieved April 21, 2009.
National Research Center. (2009, April 16). The NRC announces Grant Recipients for 2009. Retrieved April 20, 2009.
Pepicello, W. J. (2008). University of Phoenix financial information and resources. Retrieved April 21, 2009.
United States Department of Labor. (2009, April 3). The employment situation: March 2009. Retrieved April 21, 2009.
Weber Shandwick. (2008, October 13). Company leaders not communicating with employees on financial crisis, according to new national research from Weber Shandwick PR Newswire. Retrieved April 21, 2009.