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Acute Crisis in the Workplace: Erosion of the psychological contract made with internal stakeholders

Updated: Aug 1

It's been a hell of a week in the world of crisis inside the world of media and communications.


Amid the pandemic and the controversy around the election and the leaders of the free world, this week dozens of employees come forward alleging sexual misconduct on The Ellen Show, NBC Entertainment chairman Paul Telegdy is under investigation over toxic workplace culture, and Tucker Carlson and Sean Hannity were accused of sexual misconduct in new lawsuit.


The Handbook of Crisis Communication features a chapter entitled, Exploring Crisis from a Receiver Perspective* which reads: "The messages communicated by an organization in crisis play a vital role in the alleviation of a crisis situation. More specifically, communication assists in reducing the damage incurred by the impacted organizations due to the crisis event. Therefore, understanding how individuals perceive and cognitively process crisis events and post-crisis messages is crucial."


There is no question that organizations are susceptible to events that can create a crisis situation, and honestly it's surprising it doesn't happen more often given the splintered communication and throngs of social channels. A crisis at any level can both damage the reputation of the organization and induce negative anger, blame and retaliation from employees who are either affected or perceive they are. The reactions, from small to egregious disruptions of organizational objectives, can even challenge a company's legitimacy in the end. So why wouldn't the employees that are watching it or actually affected by it feel unsafe and unattended to, no less like their psychological contract with the company has been broken?


What leadership says and does during a crisis of any size plays a vital role in the safety and security the other employees feel (the psychological contract). Crucial is the understanding and response to how the organizational community perceives and responds in order to mitigate further crisis damage. In other words, leadership must first KNOW how the community is experiencing the crisis in order to minimize further crisis. With a proper value-based ecosystem in place, leaders can likely predict how employees will react given a certain situation. By having observed and nurtured the culture of the workplace in advance they could:

1. Build generic response plans

2. Identify gaps in crisis response call-to-action

3. Prioritize the types of crises that would be most important to be ready for.


The crisis trigger event compromises and perhaps even violates the values contract the employee has with the organization. Evaluating the likely response based on prior communication and an understanding which expectations and injustices the stakeholder might experience as compromised is the most insightful aspect of growing a culture. Knowing how the employee is going to place blame or incite impact on themselves is key to understanding both how to mitigate the crisis and also how to respond to future potential matters. Determination of responsibility and of course the ongoing shift of information based on more of it unfolding changes the affective responses.



Not letting an emotionally-laden crisis go to waste is a great model for responding in a way that will work towards assuring employees the leadership can and will earn the trust back and do everything in their power to eliminate a repeat performance of the same crisis (although sometimes this is out of everyone's control).


Now if I am being forthright,, sometimes crises ARE the result of choices made by organizational leaders – and these choices do indeed define what the employees do and how they react by what the organization doesn’t do. When news gets out, employees are able to determine the extent to which company decisions and values are aligned with their own. This is the sweet spot of growth, hard lessons, and with great optimism I add, organizational resilience. Where there is misalignment, it's more likely that a higher degree of responsibility to the organization will be placed. This is the finger of "blame". Another way of saying this might be, when poor choices lead to poor outcomes, those responsible will be held to a higher standard of accountability.


Based on the myriad of reactions and actions, outcomes could swing wildly. It reminds me of those books I read to my children when they were young where the reader's choice to go through a tunnel or a door customized the story and its outcome entirely. I loved those books, perhaps more than my children. To read the same book and come to 15 different endings was mesmerizing to me. Outcomes of crisis settings in the organization are much the same. Yes? Outcomes will impact how employees, other leaders, investors...all stakeholders will perceive the organization’s brand and their future intentions to interact with the company. That's a big deal! Work the crisis and mine it for ways to create psychological insurance and growth with employees - don't let the crisis work you. The media will do enough of that.


*Authored by Drs. Tomasz Fediuk, W. Timothy Coombs, and Isabel Botero



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