When Jergens Inc. stumbled across the hold-ups that so often accompany a major construction project, executives at the Cleveland-based manufacturer did not cower in the background while the rumor mill went full tilt.
Instead, they called their 150 employees together and shared the information.
“Instead of having people guessing what was going on, we gather everyone together in the cafeteria and just take 10 minutes and say, ‘OK, this is what’s happening,’” explains Jergens HR Manager Kathy Puskas. “We told them this is where we’re at in the construction process. These are the hold-ups we’ve had.”
A year ago, Jergens moved into its new Cleveland facility, about a mile from its former location. Puskas credits the company’s open management style for the smooth transition.
The companywide meetings are only part of the initiative to share information with employees. There is also a monthly newsletter and a state-of-the-company luncheon each December, at which information, such as percentage increases in revenue, is shared.
“I think it makes the workers feel more comfortable with their job and they feel they are seeing something of their contribution,” Puskas says of her company’s efforts to keep employees in the loop. “For me in HR, it’s a big help because no one is guessing.”
Although Puskas is sold on the advantages of an open management style, the opinion of its effectiveness seems to be split. Just under half of the companies which responded to the HR white paper survey conducted by the Employers Resource Council for SBN said they do not meet with employees on a regular basis to review financial information, the state of the company or go over company policies.
Michael J. Smith, director of sales and marketing for Cleveland-based Gallo Displays, believes it’s a touchy issue at best. He should know. Before the company moved to an Employee Stock Ownership Program in 1996, former company CEO Jim Gallo employed a sort of open management style that Smith says wasn’t entirely effective.
He points out that a common pitfall of sharing information about the company’s performance is that employees tend to make assumptions about the company’s spending that are not always correct.
“The down side is that people interpret the results the way they will,” he says. “Certainly, you don’t reveal your executive payroll, but those kind of assumptions are made based upon how people interpret numbers. How many people in this company know what our light bill is every month? I’d guess probably nobody. So how they can take a number and dissect it and determine who’s making off with all the funds is anybody’s guess.”
However, Smith points out that sharing information with employees is not necessarily a bad idea, but there must be clear-cut goals from the start.
“This should be just one component of some bigger picture,” he says. “If there is a business plan in place or a strategic plan that states one of the goals and objectives is to make employees feel like they’re more part of the organization, then this becomes a component of it. It’s not a good idea or a bad idea on its own merit.”
Mike Dietry, vice president of Mayfield Heights-based Victoria Insurance Group, says his company has shared information about financial performance with employees for the 15 years he has been there. For an insurance company, which is required to publicly disclose financial records, it was not such a difficult decision to share the information with employees. However, Dietry says it is sometimes difficult to do it in a way that is meaningful to workers.
“The big challenge is that the typical employee doesn’t understand, and in many cases, doesn’t really care,” he says. “All they really care about is what do I have to do from 9 to 5 to get my job done.”
The question may not be so much whether you are going to employ an open management style, but how you are going to share company information so it’s meaningful to employees from day to day.
“I think you need to somehow bridge that gap, whether it be some sort of meaningful profit-share initiative, and reduce the financial information to terms the average employee can understand,” says Dietry. “Then I think you start to get that ownership and that buy-in that’s very important.”
How to reach: Jergens Inc., (216) 486-2100; Victoria Insurance Group, (440) 461-3461; Gallo Displays, (216) 431-9500
Jim Vickers ([email protected]) is an associate editor at SBN.
