Explaining Why Isn't Enough

Last month, workers at a Sony factory in France held the Chief Executive and Chief of Human Resources hostage in protest over their severance package. Workers, unhappy over what they saw as a less-than-generous pay off following the closure of the plant, barricaded the site to stop the senior executives leaving. Fortunately, the situation was resolved without serious incident after agreement was met to restart talks over the terms of the redundancy.

Admittedly, this is an acute example but I think illustrative of a potential problem facing many struggling organisations in this time of economic downturn - namely, retaliation by employees who feel aggrieved over the way they have been dealt with during downsizing or redundancy. In the case illustrated here - as well as the ongoing situation with failed Ford car parts manufacturer Visteon - the method of retaliation was particularly extreme and used a tool for negotiation. However, behaviour ranging from bad-mouthing the company and stealing stationery, to embarking in legal action and engaging in sabotage and violence are likely to become more and more prevalent as the number of employees being laid off rises.

So, what can be done?

Evidence shows that employees are far more likely to engage in retaliatory action when they feel unfairly treated. Defined as 'making the wrongdoer pay', it is likely that in the current climate, laid off employees will be motivated to engage in retaliation as a way of restoring the balance of justice, achieve a sense of resolution and help them deal with the negative emotions associated with the experience of being made redundant. Further evidence has shown that providing justified explanations for unfavourable events such as redundancy can increase feelings of 'informational justice' and can significantly reduce the likelihood that employees engage in retaliation.

However, recent research indicates that this isn't the whole story. True, providing employees with a clear and justified explanation as to why they are losing their job will help to mitigate the risks of retaliatory action against the employer. However, it seems that the positive effects of providing such information can be squandered if the organisation is perceived to lack integrity from the start.

Take the current situation in financial institutions as an example. The actions of a minority of gung-ho traders and dealers have served to significantly damage perceptions that the banks are a bastion of integrity and professionalism. Public trust of financial institutions is likely to be at an all time low just at a time when the consequences of their actions are leading to large scale redundancies and closures. Psychologists have recently demonstrated that for individuals who believed their employer had high levels of integrity (i.e. were ethical and adhered to strict moral codes), informational justice (or the provision of justified and credible explanations) helped reduce the levels of retaliation amongst affected staff. Conversely, for individuals who thought their employer lacked integrity, levels of retaliation tended to increase regardless of the levels of informational justice. In fact, it seems as though the explanations offered were so distrusted that they actually fuelled retaliatory action. Why explaining why is not enough

In a nutshell, if the organisation is distrusted by the staff, then providing explanations as to why they are being laid off will not suffice. In fact, such explanations may actually increase levels of anti-social behaviour. Applying a 'sticking plaster' in the form of an explanation will do nothing to heal the psychological wounds of a historical lack of corporate integrity.

Practically speaking, whilst the organisation's treatment of the layoff victims is important, the origins of potential retaliation do not begin there, but in the history of previous actions related to the integrity of the company. Whilst organisations should not need convincing of the importance of acting with integrity, recent cases demonstrate that perhaps they need a little more incentive. By making efforts to build integrity well in advance of negative events such as redundancy and closure, the positive affects of perceived informational justice will be maximised and the possibility of retaliation and negative press are reduced.

This article was written by Jon Atkins from Business Psychology company Pearn Kandola. For more of Jon's writing please visit the Pearn Kandola blog.