RadioShack Case Study
RadioShack is a consumer electronics goods and services seller that operates more than 4,000 stores around the world. Over the past several years, the company has undergone a run of executive management changes including ten new changes to vice presidential and upper management level jobs. The most noteworthy change has come to upper management employees. They have experienced great instability in the CEO position. Justin Day was brought in the middle of 2006 in order to help turn RadioShack around due to his positive record in revitalizing fiscally unstable retail companies. Unfortunately things didn’t go the way that was planned and the situation in which they found themselves was as a sticky one to say the least.
The change in management and the powerful rivalry in the marketplace did not go unnoticed in the company’s financials. The stock price had been underperforming and even though Day had put a plan in place for a turnaround in the end the company felt that they had to lay off 400 employees. It was the way in which they carried out these lay offs that has drawn a lot of negative attention to this company.
In what has come to be known as one of the greatest human resources mistakes of 2006, RadioShack found a way around the uneasiness of firing someone in person, they just did it by email. A sum of 400 workers at the Fort Worth, Texas, headquarters got the critical e-mail message one day that they were fired. Company officials argued that utilizing electronic announcement was quicker and permitted more privacy than breaking the news in person, and in addition, those employees who were laid off received liberal severance packages (Bauer and Erdogan, n.d.).
Terminating workers can be an agonizing job for many managers. The communication that takes place necessitates cautious groundwork and considerable stages of skill. Anyone who is concerned with communicating with downsized employees has an ethical accountability to do it the right way, which includes doing it in person, doing it confidentially, giving the person your full attention, being truthful but responsive, and not rushing the person. Management experts agree that there is no good way to fire someone. The respectful way is to let someone know in person. A company that helps employees transition into new careers after they have been fired or downsized gains a lot of respect as an employer of choice. That respect can help the organization’s reputation. Done poorly, workers leave embittered. They become the greatest unraveler of the best marketing campaigns and go into the community with nothing but negative appraisals of the employer and make it hard to recruit any new talent (Joyce, 2006).
RadioShack would have bee a lot better off if they had carried out their lay offs in a more ethical and considerate manner. Laying off employees emotionally affects all the people who are involved. The procedure generates stress not only for the employees but also for the manager. It generates a toxic work atmosphere and bad feelings everywhere. One will be under a microscope as the remaining workers will cautiously watch everything one does. If dealt with badly one will have efficiency and confidence troubles for months to come (How to Layoff Employees without Sacrificing Compassion, n.d.).
To be effectual and diminish problems, one must systematize all the particulars ahead of time. One must have severance packages, layoff letters, explanations of benefits, and all other relevant documents organized and ready to go. A company should make corporate outplacement services accessible to the leaving workers. Outplacement services will alleviate the blow and offer sympathetic support to aid former workers. This will affect how the remaining workers as well as consumers outlook about the company (How to Layoff Employees without Sacrificing Compassion, n.d.).
Managers must make sure that they distribute the bad news in person and not via email. They should not put the dirty work onto anyone else’s plate. The boss needs to distribute the message and stand with their workers when they do so. One should know what they are going to say and say it sympathetically. After all these people are their friends and coworkers. A manager owes it to their workers to be the one to deliver the news. Finally one should permit themselves and the remaining workers to mourn and respond after the layoff. The remaining workers have lost their friends and coworkers. They will be worried for those who have lost their jobs, particularly since they have done nothing wrong. Workers should be reminded that this is not personal. It is a business choice to protect or reorganize the organization for those who remain. Carrying out layoffs is never a pleasant task, but managers and workers can get through it if it is done the right way (How to Layoff Employees without Sacrificing Compassion, n.d.).
The way in which RadioShack handled their layoffs had to be the worst possible way. It was very cold and showed not compassion for their employees at all. It not only sent a message to the employees that remained but also to their customers as well. The message that they sent was that they really don’t care. This kind of attitude can do a lot of damage to a companies reputation not only as an employer but as a company as a whole.
Bauer, Talya and Erdogan, Berrin. (n.d.). You’ve Got Mailand You’re Fired! The Case of RadioShack. Retrieved from http://www.flatworldknowledge.com/pub/organizational-behavior-v1.1/198746