Weymouth Steel Corporation

WEYMOUTH STEEL CORPORATION

Case Overview:

Weymouth Steel Corporation in September, 1990 is having a critical time in finding out the ways to communicate the bad and good news to its salaried employees. An erroneous selection of time and communication channel selection may demoralize the workforce completely resulting in a disaster for the company.

The good news is that the company management has decided to increase the salary and benefits of almost all the salaried employees regardless of their grades while on the other hand the bad news (because of the long time slump in the steel industry), the management has decided to go for downsizing of the salaried workforce. The chairman of the board Carl Weymouth and the management realized the sensitivity of the task, however, if the management is able to inspire its workforce with a new vision and hope for future success; this dilemma can easily work as a catalyst for company growth.

But once the management will speak out the downsizing news to its employees, the challenge to reduce the arising stress will be higher. Therefore I will recommend the following strategy with time lag to communicate the good and bad news to employees and to curb the rumors in the media. But firstly the new changed vision of the company should be:

Proposed Vision:

"Weymouth steel corporation will endeavor to become a leading steel corporation, committed to excellence in product quality and continuous innovation to best satisfy our customers, where all people grow to their best potential in safe, positive and nurturing environment".

The underline theme and its explanation are given in the exhibit 1. A vision is a crucial underpinning for change and management should repeat it again and again to get it absorbed by the employees.

Recommended Communication Strategy:

I believe that there should be multiple stage announcements of the bad and good news with the time lag, as if the management announced the good news and bad news together then the effect of the good news will be nullified.

Therefore I devised the following step by step plan to communicate the good and bad news along with the company's new changed vision as:

1. Discussion with the Senior Management:

The purpose of this discussion is to take senior management into confidence on the proposed communication strategy for the new salary and benefits plans and the downsizing effects.

2. Meeting Call of all the salaried employees:

On this stage, I believe that Mr. Weymouth should follow the recommendations of James. Harrison, V.P. for Public Affairs, to openly communicate important information to the workforce. In fact it is meant to break the ice to the employees. This stage should be further divided into two steps.

a) Meeting Agenda Distribution;

This step is necessary as to prepare the salaried employees for sudden shock of downsizing but in the agenda there should not be given any clear picture of the downsizing issue, only the vague idea about the probable bold decision and current company economic position should be covered

b) Meeting:

The focus of this meeting is to communicate both the downsizing and the salary / benefit packages to the employees. For this conference to break the bad news, management should use indirect approach (exhibit 2). To nullify the effects of bad news, management should emphasize on salary and benefit packages otherwise only giving the bad news will demoralized the workforce completely.

I think the meeting should be structured as following and should be headed by Mr. Weymouth himself.

In the beginning, Mr. Weymouth should start with the buffer in his speech by paying a compliment and show in appreciation for the past performances of the employees and then he should explain the current situation of the industry telling that the steel industry is enduring a long term slump due to stiff competition from overseas players. And furthermore he should also explain that in the future the company business is likely to fall 25%. In addition to that Mr. Weymouth should also talk about the needed funds to install the new production facilities within the factory to satisfy increasingly stringent federal anti pollution standards. Then he should explain that company requirement of $ 2 billions a year and how the company has been cutting down the costs for its survival.

After describing above reasons, he should reveal the bad news but before revealing the bad news, Mr. Weymouth should give the good news of the salary increase of all the salaried employees and explain the improved benefits, provision of retirement, medical and dental care and above all the life insurance of the employees.

After going through this good news part, Mr. Weymouth now should explain the sad news of the downsizing but during this part of speech he should explain that reduction is taking place across the board; proportionally and no grade will be significantly more affected than any other. He should