Friday, April 10, 2009, 10:47 AM

Employee communication can bolster morale and profit

In this month's column for The Daily Record, we look at how communicating effectively with employees can help a company's bottom line. The link between internal communications and the cash register is pretty strong. You can read it below or check it out at The Daily Record's website by clicking here.

Employee communication bolsters morale and profit
HENRY FAWELL
Special to The Daily Record
April 10, 2009

In this economy, the chance to ring the cash register more often should motivate any company. As managers look for every opportunity to improve their bottom line, they might want to consider a fairly unconventional tool: employee communications.

Believe it or not, shareholder returns for organizations with the most effective employee communications were 29 percent higher from 2002-2006 than firms with less effective communications, according to a recent Watson Wyatt study.

And in today’s economy, the prospects of layoffs, benefit cuts and uncertainty over an organization’s future only accentuate the need for constructive communications between management and employees.

Unfortunately, not every employer appreciates the connection between work force morale and the organization’s bottom line. Seven out of 10 Americans believe their employers don’t communicate with them enough about the current economy and its impact on their business.

Some managers simply fail to engage their work force about the organization’s mission, values and productivity. Others communicate with reporters, shareholders and customers while leaving their own employees in the dark.

So here are a few tips for companies looking to focus their communications inward and their revenue upward.

Be clear: An internal communications plan without a clear message is like a Rolls-Royce with a flat tire: It may look good, but it’s not going anywhere. Before engaging employees, managers must ask themselves tough questions about where the company is headed and how employees will help the company get there. This can help a manager communicate with clarity, resonate with employees and motivate them toward a specific goal.

Be honest: Henry Ford wisely stated that managers must treat employees like members of the extended family. Doing so begins with honest dialogue. In this economy, the prospects of layoffs weigh on the minds of countless employees at Baltimore companies. With Maryland’s unemployment rate at a 25-year high, their concerns are justified.

If asked by an employee, managers who are considering layoffs would be wise to simply state, “I can’t answer that right now” rather than lie and jeopardize the company’s credibility with its work force.

If layoffs are announced, consider team meetings with remaining employees to discuss how the company is repositioning itself to succeed in the future and offer an open-door policy to support and motivate employees.

Be open-minded: Too many organizations view internal communications as a one-way street. Management makes a decision and feeds it to the work force via memo — end of communication. But employees today expect more. The rise of social media sites such as Facebook has created demand for a two-way dialogue between employees and managers, and innovative employers are adapting accordingly.

Toyota has created an online forum for employees to ask questions about the company and its role in an ever-changing economy. Doing so gives Toyota a read of its work force’s pulse and positions management to address concerns head-on. You’re likely to pick up a few good ideas from bright employees along the way.

Be holistic: Your communications should not focus simply on the outside world. Smart managers view their employees as an army of surrogates, many of whom are willing to take the extra step to support the larger organization.

If your company finds itself under scrutiny from the press or the public, be sure to communicate clearly with employees about how management is responding. The last thing you want is a work force operating in an information vacuum with no choice but to believe what it reads in the press. Proactively engaging employees eliminates confusion and arms your work force with the facts it needs to represent your company at home and in the community.

Be profitable: If nothing else motivates you, perhaps profits will. Take it from Southwest Airlines’ Herb Kelleher, who once said employees who feel valued provide better customer service, and customers who feel appreciated by a company become repeat customers.

Plenty of factors contribute to a company’s bottom line — sales, marketing and productivity to name a few. But the link between internal communications and the cash register is real. In this economy, that should motivate every company to rethink how it communicates with its work force.

Henry Fawell is a communications consultant for Womble Carlyle Sandridge & Rice PLLC in Baltimore and was press secretary for Gov. Robert L. Ehrlich Jr. His column appears monthly, and his e-mail address is henry.fawell@wcsr.com

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