Employees of Hated Companies Suffer: The Innovators - TheStreet

Employees of Hated Companies Suffer: The Innovators

When a company is widely hated, its employees feel stigmatized and their morale suffers. This is a problem BP will have to tackle.
Author:
Publish date:

Last year,

MSNBC.com

published an anonymous letter from an

AIG

(AIG) - Get Report

employee describing how it felt to work for "the most hated company in America."

AIG had become the target of public outrage over executive bonuses paid by companies that benefited from public bailouts in the wake of the Wall Street meltdown.

This regular employee who "did not work in the Financial Products division and ... did not get a bonus" not only feared physical harm from anonymous threats made against AIG and its workers, s/he watched the company's stock plummet, saw former clients head for the hills and observed colleagues either leave AIG for better job security or get laid off. "Employed but embarrassed," the author observed that continuing to work for a hated employer was "a challenge to say the least."

As of Jan. 5, AIG topped

24/7 Wall St.'s

list of

"The 15 Most Hated Companies in America,"

which also included

UAL's

(UAUA)

United Airlines,

Level 3 Communications

(LVLT)

,

Hertz

(HTZ) - Get Report

,

Citigroup

(C) - Get Report

,

K-Mart

,

Blackwater Worldwide

,

Dell

(DELL) - Get Report

and

Abercrombie & Fitch

(ANF) - Get Report

.

The rankings were based on a five criteria: employee impressions; total return to shareholders; customer satisfaction and reputation rankings; brand valuation changes; and the collective views of taxpayers, Congress and the Administration.

As

24/7 Wall St.

observed, some of the companies on the list were "widely despised because of the businesses that they are in." Airlines and franchises were cited as two industries that are likely to make enemies among customers and workers, especially when resources are stretched by a bad economy.

Interestingly, not a single oil company made the list. Isn't it amazing what six short months can do?

As oil continues to pour into the waters of the Gulf of Mexico from the exploded Deepwater Horizon rig, it seems almost certain that

BP

(BP) - Get Report

has vaulted to the top of everybody's list of most hated companies. More than 40 days into the catastrophe, BP has been forced to admit -- at last -- that it has no quick way to stop the flow, and that it may not be able to contain the leak until August.

President Obama has acknowledged that, despite the best efforts of BP, the Coast Guard and hundreds of volunteers, oil will wash up in places it isn't supposed to be. Underwater footage taken recently by Phillipe Cousteau, Jr., grandson of ocean explorer Jacques Cousteau, and

ABC

"Good Morning America" reporter Sam Champion revealed a nightmarish mess beneath the surface.

The direct damage to wetlands, beaches and the Mississippi Delta will cost billions to repair, if it's even possible to do so. The indirect economic and emotional damage to communities on the Gulf coast that depend on fishing and tourism will be even greater. This oil spill already ranks as the greatest environmental disaster ever to strike the U.S., and we're not done yet.

One can only imagine what it must be like to work for BP. If AIG's employees suffered from public anger at their company, BP employees are undoubtedly in for much worse. And then, of course, there's the troubling question of whether those same employees can trust their bosses. BP CEO Tony Hayward told

Sky News

in mid-May that the Deepwater Horizon oil spill would end up having only a "very, very modest" environmental impact. If Hayward could make such a statement to the world, how confident can BP employees be that the company's management will be truthful with them about anything?

On Memorial Day,

MSNBC

published

a thoughtful piece on how corporate crises harm employee morale

by contributor Eve Tahmincioglu . The article cites a study co-authored by Villanova School of Business assistant professor Patrick Maggitti titled, "Leadership in Hypercrisis: Leading in the Face of a Shaken Culture" that offers examples of past corporate crises that severely impacted workers.

First among them was the 1989 Exxon Valdez oil spill, which left

Exxon

(XOM) - Get Report

employees feeling stigmatized and shamed to work for a company that was perceived as being uncaring about the environment. The Valdez spill, a mere 11 million gallons, was once among the biggest environmental disasters in U.S. history. Even the most modest estimates of the Deepwater Horizon spill are more than twice that bad.

It may be too late for BP to repair its shattered reputation, though much will depend on how the company handles itself through the clean-up effort. But Tahmincioglu's article suggests that it will not be enough for BP to focus on externals like its stock price and public relations. Eleven employees died when the Deepwater Horizon rig exploded, and BP's surviving workers will be watching carefully to see how the company reacts.

Toyota

(TM) - Get Report

has responded to employee questions about massive recalls earlier this year with town hall meetings, online forums, and an internal Web site with up-to-date information for workers and dealers. BP might be wise to do something similar, and both companies would be smart to tell their workers the truth.

Other companies can watch and learn as BP struggles to manage the consequences of the oil spill. Most businesses will never face a disaster of this magnitude, but lesser crises present similar challenges. When trouble strikes, it's important to reach out to the public, but it's just as important to make sure your employees get the accurate information they need to remain proud, productive workers for their company.

Lauren Bloom is a Washington, D.C. attorney and the CEO of Elegant Solutions Consulting, a consulting firm dedicated to helping professionals, business and association management executives build trust with their clients, customers and members by "walking the ethics talk" in their daily practices. She is the author of the "The Art of the Apology -- How to Apologize Effectively to Practically Anyone."