Bosses: Avoid These 8 Behaviors That Scare Employees

by Sheryl Nance-Nash on August 19, 2013
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Reprimanding an employee in front of the whole staff is almost certain to crush office morale. Worse still, if someone gets fired like an AOL employee did recently. But leaders often scare employees in far more subtle ways without even realizing it — and often believing that they’re doing more good than harm.

Here are eight behaviors to avoid, so that you don’t cause unnecessary turmoil in the workplace.

1. Fire a key employee without an explanation. Getting rid of a problem employee is often a necessary task. However, when you let someone go, you should take care to make sure all remaining employees understand the situation, so that they don’t fear for their own jobs, says John Malloy, president and owner of Sanford Rose Associates-Santee, an executive search firm.

“Employees want to understand what happened and what causes a person to be terminated,” Malloy says. “If it appears that a person can be terminated with no good reason, they will want to leave as soon as possible.”

2. Discuss the sale of the business prematurely. Talking openly about your plans to sell the business before a sale is imminent is ill-advised. “If I know you are selling and I am not an equity stakeholder, why would I stick around?” asks David Lewis, president and CEO of OperationsInc, a human resources outsourcing and consulting firm.

The sale of any business prompts widespread speculation about the future. Malloy notes that top executives and other key staff members will be the first to know — and the first to look for new jobs. Even if the sale is to a well-known customer or partner, it should be handled with care.

“Employees need to know how they fit into the future of new owners and managers,” he says.

3. Bring in a consultant. Bringing in an “outsider” can make employees feel as if they are under a microscope. “To avoid these uneasy feelings, business owners need to clearly explain to their staff the context in which the consultant is being brought it,” explains Jody Johnson, co-owner of ActionCOACH Team Sage, a business coaching franchise in Miami.

Tell employees that the consultant’s focus is on improving the work environment and fine-tuning the shared vision for the company, she advises.

4. Change strategies midstream. Whatever your reasons are for a shift in strategy, staffing, or management, make sure your employees are in the loop about why the change is taking place, Johnson recommends.

“By nature, humans are resistant to change, so small-business owners should lead with the ‘why’ of the strategy shift and not the ‘what,’” she says.

Lewis adds that “too many closed-door meetings at times of uncertainty, followed by little or no communication to the team about what is going on, leads to watercooler speculation, which leads to instability.”

5. Utter the phrases “we need to talk” or “I hate to tell you.” If you want to get someone’s heart racing, say those words. Critical employee evaluations are inevitable, and these phrases are telltale signs to employees that bad news is coming their way.

“Instead, make sure you think before you speak and choose your words carefully,” Johnson says.

6. Lose touch with key customers. Typically, a small-business owner is the primary contact for major customers. If the owner allows these relationships to deteriorate, Malloy says, employees may worry where the company is headed. “Some employees will worry about the real focus of the business and start looking for a new job,” he warns.

As a company grows, the amount of contact with any one customer may shrink, but owners need to maintain open, strong relationships with their big accounts, he says.

7. Keep mum about money. When an employee feels the business is threatened due to financial matters, it scares them, Malloy says. “Many times, I am contacted by employees who have heard a rumor or have a small piece of information regarding company finances,” he says. This is most often a problem when owners and leaders only share bits of information on an infrequent basis.

“Being late in payments to a supplier or late on a tax payment [may] cause great concern among employees,” Malloy says. “The differences between cash flow and profit and loss are widely misunderstood. The worst offense is being late on a paycheck or failure to pay insurance.”

The best solution is to keep your employees well educated and informed. “You do not need to share the books, but you need to keep everyone well informed with frequent updates on the company’s finances,” Malloy says. “If a major issue comes up, tell all what happened and why. Avoid having employees imagining the worst.”

8. Disregard legitimate employee complaints. When your employees come to you with a problem, take the time to listen and do your best to resolve the issue. Ignoring complaints and or marginalizing people sends a message to everyone, not just those who are complaining, that you don’t care, says Nicholas Woodfield, principal at the Employment Law Group.

Ignoring the issue could prove costly. “The only relief for employees in such a situation is to fix it on their own, either by leaving for another employer or asking the courts to fix their problems for them,” he warns.

Sheryl Nance-Nash is a business writer for Intuit and is passionate about solving small business problems.

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