'Can't buy me love' and other corporate culture truths

Employees quit their jobs for one of two reasons: They're either trying to get out of an adverse situation or they are moving toward something better.

When an organization is going through a period of instability and uncertainty, an exodus of workers will only compound its problems. However, by establishing a philosophy that demonstrates the organization supports and values its employees, leaders can prevent crises from upending their company's culture and driving employees away.

LinkedIn is currently attempting to cope with this issue. On Feb. 5, after the company shocked Wall Street with far lower-than-expected revenue forecasts, LinkedIn's shares closed down 43.6 percent, slicing off nearly $11 billion in market value, according to Reuters. The stock plummeted as much as 46.5 percent to a more than three-year low in its most drastic decline since the company's public listing in 2011. Analysts reacted with consternation, with at least nine brokerages downgrading LinkedIn's stock from "buy" to "hold."

Jeff Weiner, CEO of LinkedIn, dove into damage control. His first reaction when the stock plunged was to call an all-hands meeting to reassure employees. His thesis: It's not whether or not a company will experience serious difficulties, but how the organization plans to navigate through them.

"We are the same company we were the day before our earnings announcement," said Mr. Weiner, according to Business Insider. "I'm the same CEO I was the day before our earnings announcement. You're the same team you were the day before our earnings announcement. And most importantly, we have the same mission, vision and sense of purpose in terms of our ability to create economic opportunity. None of that has changed. It hasn't changed one iota."

Mr. Weiner's next move was to relinquish his annual stock bonus of $14 million back to the company. "Jeff did not receive an equity package this year at his request," a LinkedIn spokesperson told, Re/Code. "He asked the compensation committee to take the stock package he would have received and put it back in the pool for employees."

Big problems call for big solutions

An important facet of recovery for organizations enduring significant difficulties is upholding its mission and mitigating employees' concerns as much as possible. Leaders can employ various tactics to this end. Grand gestures such as Mr. Weiner's decision to hand off his multi-million dollar bonus are intended to demonstrate to employees that the leadership has their interests in mind during trying times, and they are willing to make some personal sacrifices for the good of the company.

"CEOs have to make both personal and business decisions when facing difficult times," says Chris Van Gorder, president and CEO of San Diego-based Scripps Health. "The worst thing a CEO can do is fail to make critical decisions because they are difficult. That's a true failure of leadership."

The healthcare industry is well-accustomed to treading through uncertain waters. Since the advent of the Affordable Care Act in 2010, an abundance of ever-changing rules and regulations, shifting payment models and increasingly stringent expectations for quality and value of care have put enormous pressure on hospitals. Many have succumbed to these forces, leading to numerous closures and bankruptcies. Mr. Van Gorder says Scripps has experienced its own share of challenges.

"Given the changes in healthcare reform and the shift to value, we have been impacted by flat revenues while costs — like drugs — continue to rise," says Mr. Van Gorder. "We can't be fair to our patients, our ultimate mission, if we can't deliver accessible, high-quality and affordable healthcare."

The cumulative effect of these pressures combined with the uncertain direction of the nation's healthcare system is disagreement, discontent and dissatisfaction among hospital administrators and clinicians alike. Taking action to sustain a positive culture despite these pressures and uncertainty is critical to hospitals' survival.

A culture of support and compassion — not monetary rewards — will yield the biggest returns in the long run

Mr. Weiner's decision to reinvest his $14 million bonus back into LinkedIn is commendable. However, the positive effects of such a gesture will probably not be long term.

"It doesn't make much of a difference," Brian Kropp, PhD, human resource practice leader at CEB told Bloomberg Business. "There's kind of a flurry of talk and activity about it. It doesn't actually sustain." Dr. Kropp pointed out such a gesture may also give employees the false expectation of a bonus in the coming year. "A well-written thank-you note from a manager has as much of an impact as a cash bonus," he added.

In the case of LinkedIn's tumbling stock, Mr. Weiner may have concluded that accepting a $14 million bonus during such a tumultuous time would only increase employees' distress and even prompt some to leave the company. In this sense, Mr. Weiner — with the right intentions — may have believed that forgoing his bonus would foster greater camaraderie between the leadership and employees. This may be so, but as Dr. Kropp said, the effect of such actions will likely not last in the long term.

When it comes to garnering employees' commitment to their jobs and to the organization, creating a culture that shows employees they are valued and genuinely cared for goes much farther than monetary rewards.

Mr. Van Gorder says Scripps has worked toward achieving this by adhering to a no-layoff philosophy, in which eliminating jobs is the last resort, and the company takes an active role in helping secure new employment for those affected.

"I think even downsizing and restructuring decisions can be done in a compassionate way," he says. "As a result of our corporate philosophy, we try to do what we can for our people during times of restructuring — which is inevitable in any business at some point."

More than a decade ago, Scripps created a Career Resource Center for employees whose positions are "eliminated or restructured at no fault of their own." Employees placed into the program are paid while human resource experts work with them to find another position within Scripps. Over the past decade, more than 1,000 employees were placed into the CRC and more than 90 percent are still with the company today, according to Mr. Van Gorder.

"The difference in culture is significant," he says. "I think our managers and employees expect us — me — to do the right thing for our patients, but they also know that our culture demands that be done in a supportive and compassionate way if it impacts our staff — and they know that we have systems like the CRC that will help support employees if they are individually impacted. It's truly a two-way street."

A strong corporate culture cannot be built overnight, and it certainly cannot be bought. Mr. Weiner's decision to reinvest his bonus back into LinkedIn helps demonstrate his commitment to his employees and the future of the company. However, cementing this commitment over time through the establishment of programs and services designed to promote employees' well-being has unparalleled effects on culture, and that is what will ultimately make employees stick around during periods of adversity.

Copyright © 2022 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.

 

Featured Whitepapers

Featured Webinars