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Gini Dietrich

Employer Ensures Employees Aren’t Happy by Leading with Fear

By: Gini Dietrich | November 7, 2012 | 
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This morning, 600 employees at Heritage Hills Golf Resort & Conference Center in York, Pa., are looking for new jobs.

They knew this day was coming because on Sunday night, Matt DeRose, their fearless leader, sent an email to all staff saying if President Obama won a second term, “increasing expenses brought on by recent regulations, taxes, and the stagnant economy could force his company to consider layoffs.”

And so, employees are going to work wondering if today will be their last.

Not only that, but if they’re lucky enough to keep their jobs, they could be moved to part-time status in order to “beat” the health care law that requires organizations with more than 50 employees to either offer insurance or pay $2,000 a year to each employee who is not covered.

Fear in Leadership

A client of ours, who also is a very good friend of mine, wrote a blog post yesterday about fear in leadership.

In it, he describes the different thresholds leaders have when it comes to fear and leading our organizations.

He says,

We can’t stop and do nothing, we need to take action and keep business running as usual.

We need to keep business running as usual.

It’s scary running a business. You have to take a lot of risk that could end the organization as you know it.

Your employees worry about doing their jobs really well and about taking care of their families.

You have to worry about doing your job really well, keeping customers happy, increasing revenue, improving margins, developing equity to improve your balance sheet, keeping your pipeline full, watching trends, understanding how the markets and politics will affect your business growth, keeping employees happy, and taking care of your family.

But you can’t show fear. And you certainly can’t let it influence your decision-making.

Morale and Growth

I”m not one who typically reads the news in York, Pennsylvania so, when Jason Konopinski sent me the link to the article about Heritage Hills, the blood vessels in my brain nearly broke.

DeRose is not only not keeping business running as usual, he is not taking responsibility for decisions made in his business. He’s blaming the White House, a very entitled  way of looking at things.

Look, I’m a business owner. The years 2009-2011 were really terrible for us. I had to learn how to keep a business alive without access to cash or growth opportunities. It was really miserable. I thought last year might be our last. But I never once blamed it on the economy, the White House, or anyone else. I take full responsibility for those lean years and they were great lessons (albeit very expensive).

We live in a free country. We get to make our own decisions. And one of those decisions is to lead with confidence, maturity, and grace.

I’m glad I’m not a Heritage Hills employee. My stomach would hurt today as I made my way into work to discover whether or not I had my job.

The leader is not demonstrating great leadership. He’s not creating goodwill and morale. He is leading with fear. And he’s leading by coercion…”You vote for my guy and we’ll see about keeping your job.”

Today it sucks to be a Heritage Hills employee.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

92 comments
KevinVandever
KevinVandever

I wonder if this dude has a family and if he sent them a similar email: Dear Honey, Mary and Jimmie, I am sorry to inform you but as of today, I have to let you go. I'm sure I'll miss you...Honey your beef wellington was divine and although you never did fold my shirts correctly, I knew your heart was into it. And kids, although I complained about attending your soccer games and dance recitals, I will miss them, too. They were a nice diversion from the important things in business. The good news is that the money I would have spent on gas, uniforms, snacks, family lunches, etc. can now be put to more fiscally responsible areas. I'm sure you understand. Don't blame me. I warned you this day would come. I said that President Obama winning a second term, increasing expenses brought on by recent regulations, taxes, and the stagnant economy could force his me to consider family layoffs. Please leave your keys and cell phones on the kitchen table. I wish you all well in your future endeavors. 

TonyBennett
TonyBennett

Fear can be an effective form of leadership... If you want to be despised and loathed with the likes of Stalin & Hitler. I feel there's a good Yoda quote I could use but I'm but gonna look it up. I used to work for an organization, well a region within the company, that used fear tactics for sales (de)motivation. I stuck around nearly 6 years cuz the money was good, but decided self-respect and quality of life was more valuable. Oddly enough, a few months after I left, the regional vice president responsible for most of it was fired. 6 months ago we had a chat and he too realized the error in his methods. He apologized, it was refreshing. If you can't lead with realist positivity and courage, you should apply for a local dictatorship role at your nearest communist country. Let us know how that works out!

ginidietrich
ginidietrich

@GregMarcus2 @LisaPetrilli It IS despicable!! (sorry for the late response)

Suzi_C
Suzi_C

I hate fear mongering.  Whether we're working with people or animals, positive techniques work far better.  This election cycle has been brutal and fraught with fear mongering. We've had similar discussions (in reverse) where I am this election cycle.  The very powerful union lobby convinced a certain subset of the economy that if certain events were to happen their worlds would cease to exist, "dogs and cats would start living together and there would be mass hysteria!" Meanwhile, businesses are leaving the state in droves because of the tax burden taking jobs and families who use the services with them. Both entities NEED each other and could likely benefit from each other's thinking.  For example, a tax increase was voted in.  The body that will benefit will now refund money to the folks who use its services. Why not  invest the money in an interest bearing account and using it to cushion future fiscal downturns?    

mmhemani
mmhemani

@blakedenman I guess the article is little different but i am more addressing to the CEOs who give a shit to their employees!

Ijibran
Ijibran

@seanmcginnis @ginidietrich yes have been in that sitiation

Erin F.
Erin F.

Bleh. I've actually been working on a post about how not to build company morale. Leading with fear is at the top of the list.

Latest blog post: Write Right Dreams of a Dragon

KensViews
KensViews

Fear as a motivational tool. Sure, it works during bad times. But the moment the economy shows signs of lifting,  your employees will leave so fast it'll make your head spin...and possibly go to your competitor. Owning a business isn't for the faint of heart. If you're going to own a business, big or small, you've got to have guts. Man Up!  Or, based on last night's Senator and other races, perhaps I should say, "Woman Up!"

New England Multimedia
New England Multimedia

Because I always endeavor to see both sides of an issue (the peacemaker in me), I'm going to give the employer (a golf course owner) the benefit of the doubt here and assume he's in a difficult financial place already, as many businesses are. When people are unemployed, underemployed, or being supported by taxpayers, they have little discretionary income, and discretionary income is what keeps golf courses, restaurants, and entertainment facilities in business. 

 

As those of you who are employers (or self-employed) know, employees, clients, and vendors are rarely privy to the true financial state of a business. That's something most business owners keep under wraps, and in the case of a struggling business, it's to preserve the "illusion of success" needed to continue to stay in business. A friend of mine worked for a now-closed-and-in-bankruptcy trucking company for 20 years as their office manager, and never saw the pink slip coming last year. The high cost of fuel was the last nail in the coffin for the company, which had already been "cutting costs" by delaying payment of their bills (THAT she knew about). She's been unable to find a job, owns her own home (now in disrepair), is selling MLM products for several companies, her husband has faced multiple surgeries, and they have a teenaged daughter. There's been a domino effect in our town, as drivers are out of work and vendors (gas station owners) are not being paid very large sums of money owed them. 

 

Did the company owner owe it to the employees and drivers to let them know things weren't going so well, and pink slips might be coming? And if he or she knew that regulations coming down the pike would put the company over the financial cliff,  would his employees and drivers have a right to know?

 

So the question here becomes, how much financial information does a business owner "owe" his employees? If the employer in this case (the golf course owner) wants to stay in business, is already struggling, has invested into risky additions (the tubing hill, etc.) to bring in more customers, and knows that $2000 per employee is going to push him over the edge, is it fear-mongering to share that information with his employees, who would, in the case of a 2nd term for President Obama, be joyfully anticipating healthcare coverage under the ACA's regulations? That's for you to argue! 

 

I predict a lot more small businesses reducing full-time employees to part-time to cut costs because of the ACA, just to stay in business. Both employer and employee suffer when rising costs and dwindling income -- whatever the reasons -- force an employer's hand. We don't have employees relying on us, so any financial decisions, investments, or mistakes we make affect only us -- no one else. That gives us tremendous freedom for which I'm thankful. But other businesses need actual employees. And for businesses with employees, everything's up in the air if they were already hurting financially. I think things would've been up in the air either way, but with the ACA, that's a concrete promise of a giant bill coming due -- a bill many already-struggling small businesses with 50+ employees won't be able to pay, given the state of the economy. 

 

What do you think? 

 

TedWeismann
TedWeismann

It's probably fair to say that his people management skills reflect his overall business management acumen. This is likely the reason he's in this kind of trouble financially, not because of government regulation. If it's that bad, every small business would have to do this, and the best ones learn how to adapt, as @HeatherTweedy said. Sad story.

RebeccaTodd
RebeccaTodd

And say, are we going to #TeamBlogJack the "contact us" form on the Heritage Hills site? Because I just left a pretty snappy comment...

ginidietrich
ginidietrich moderator

 @TonyBennett I'm sure you don't watch The Good Wife, but on this week's episode, the partners at the law firm were trying to figure out why their counsel was being so rude and abrasive. it turns out he's reading the Steve Jobs biography. I guess people think it worked for him and he built the most successful company in the world so it should work for everyone.

ginidietrich
ginidietrich moderator

 @Suzi_C It's very short-sighted. I'm a business owner. We pay a portion of our employee's benefits. In fact, we pay more than what Obamacare requires. So I'm really having a hard time understanding why leaders are pushing back on it. Yes, taxes will increase. Yes, all Americans will have healthcare. Yes, companies are going to pay for it. But I'd MUCH rather have preventive care for my team than for someone to get sick and be out of work. 

magriebler
magriebler

 @KensViews Woman up! Nice. And there's going to be a lot of head spinning once the job market comes back.

belllindsay
belllindsay

 @KensViews I can't *fathom* owning my own business. The pressure and stress...!? Yikes. 

Greg Marcus
Greg Marcus

 @New England Multimedia  I think this was a spiteful, cowardly thing the employer is doing.  I find it hard to believe this is a rational business decision.

PJWright
PJWright

 @New England Multimedia  I have heard the arguments that ACA is going to put small businesses out of business.  I would like to ask a question from the other side of the fence.  Wouldn't there be an advantage for a business if their employees are healthier because they are able to get preventative care, have a doctor to go to when they get sick instead of waiting until it's emergency room time, and don't have onerous health insurance payments looming over their heads just for the least amount of coverage?

I believe that the golf course owner was trying to ensure that his person won the election and was coercing his employees to vote his way.  Maybe if he had approached his assumed problem by involving his employees, he would have found that they were willing to help in any way they could.

AmyMccTobin
AmyMccTobin

 @ginidietrich I think it is a very Dickensian way of thinking; my last boss thought that he deserved respect BECAUSE of his position, not because of his actions.... that's why he's the last boss I'll ever have:)

KensViews
KensViews

 @belllindsay That's what I thought too. Worked for others for 25+ years. Opened my own consultancy at age 50.  Even with the dips, and believe me, there were DIPS in 2008 and 9, I've NEVER been this happy, career-wise!

belllindsay
belllindsay

 @FocusedWords  @New England Multimedia  I see both sides of the coin (and being a Canadian the whole "scared of healthcare" thing never ceases to amaze me) but I have to agree with FocusedWords that this was outright coercion. I don't think the argument is that said business owner *should* reveal his/her financials to everyone - the argument is that telling your employees "Vote for my guy or lose your jobs" is a horrible way to be a leader and IMHO borderline illegal. 

New England Multimedia
New England Multimedia

 @FocusedWords Yes, but the same can be said for an individual or a family who isn't purchasing health insurance because they can't afford it. Just as an individual or family struggling financially cannot afford health insurance, neither can a financially-strapped business afford to provide it. The problem is that the economy relies on businesses to stay in business and provide goods and services, pay taxes, and provide wages. So when struggling businesses close their doors in response to rising costs, the economy is driven into a deeper financial crisis. If there's no money to pay the rising costs of being/staying in business, there's just no money. So businesses either cut costs (reducing labor, hours, etc.), or close their doors. 

RebeccaTodd
RebeccaTodd

 @belllindsay I have a great deal of trouble holding my tongue, as you well know! Hah. Wonder if I get a reply...

KensViews
KensViews

 @AmyMccTobin  @ginidietrich  I always tell workshop participants that being a leader isn't about title or money.  The only way to know if you're truly leader is to turn around. If you've got followers (whether they officially report to you or not) you're a leader.  If you don't have followers (even though you may have people who report to you) you're not a leader.  That guy may have been your boss, but he wasn't a leader!

belllindsay
belllindsay

 @KensViews I'll take your word for it! LOL And congrats! I took a huge leap and left a union job with 20 years seniority (TV) a few years back. Best thing I ever did. :) 

RebeccaTodd
RebeccaTodd

 @belllindsay  @FocusedWords  @New England Multimedia  I feel this could have been broached with class and tact. If your business is struggling and you have to shut down, you could have solicited empathy and support from your community. It was the way he attempted to use threats and coercion that really got me going... Usually, I feel for small businesses and hope for the best for these entrepreneurs. It was the way this person went about it that is disgusting and dare I say unconstitutional. 

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  1. […]  Employer Ensures Employees Aren’t Happy by Leading with Fear – fear, hate-mongering and small business all in one article. […]

  2. […] Obama won a second term, he would layoff or position most of his team for part-time employment. He stated, “Increasing expenses brought on by recent regulations, taxes, and the stagnant economy” […]