What's the best way of preparing employees for possible layoffs?
Richmond, Va.-based Signet Bank Corp. recently took the unusual step of dropping severance information packets on the desks of all 5,000 of its employees.
The packets provided employees with details about separation benefits and spelled out what the workers can expect from a restructuring plan to be unveiled later this year.
Signet officials said the aim was to provide a sense of security while encouraging employees to consider leaving the company voluntarily.
The $12 billion-asset bank company, after all, is in the midst of a top- to-bottom examination of its operations in an effort to remedy market concerns about flat earnings and inflated expenses.
When they arrived on employees' desks, the packages caused some unintended reactions, however. Though most employees were said to have appreciated receiving the information, the raising of severance issues without firm information about whose jobs might be cut has caused some worry, one employee said.
"Morale is not going to be the best when you've got unanswered questions," said Mary McAden, a sales team leader and assistant vice president for Signet branches in Mecklenberg County in Virginia. Ms. McAden noted, however, that the proposals appear generous.
Teri Schrettenbrunner, a Signet spokeswoman, declined to discuss details contained in the severance information packages, but she confirmed they were delivered Jan. 28.
"Whenever you have a restructuring of this nature, there is a lot of anxiety associated with the restructuring. This was a way of alleviating some of that anxiety," Ms. Schrettenbrunner said. "It helps build a foundation of trust. It also helps ease the transition for employees who may desire to seek employment outside the company."
Because Signet's top brass are still figuring out the restructuring plan, downsizing details will not be announced until June, said Ms. Schrettenbrunner.
Mitch Potter, a consultant with Hewitt Associates in Minneapolis, said Signet's move appeared to be part of a trend by large companies to be more open with employees.
"As a rule, people are trying to be more communicative, more open, and give more information rather than less," he said. "It's better than sneaking around and being more secretive."
In mid-December Signet selected 20 executives to work full time on formulating the redesign, and another 80 executives are helping out part- time. The company also is receiving assistance from an outside consulting firm.
Signet has said it will take a restructuring charge in the second quarter; how big it will be was not disclosed.