• It is often difficult to control the spread of bad news in corporate settings
• Communicating bad news poorly can alienate employees, especially in the case of layoffs or downsizing
• Honest and open communicating, and demonstrating integrity, helps managers and senior leaders break bad news in a way that keeps employees on side

According to satirical sci-fi writer Douglas Adams, bad news is the only thing capable of travelling faster than light.

Everyone has been forced to deal with it at some point, either as the recipient or messenger of misfortune. In the corporate world, trying to contain or control the spread of bad news among employees has left many a manager tearing their hair out and asking:

“Is there anything that can be done to make these situations more tameable?”

In Adams’ novel, the aliens try to build super-fast spaceships powered by bad news. The concept, while farcical, nevertheless suggests senior leaders can learn how to handle grim tidings efficiently and productively. Yet, this does require preparation.

Dr Zara Whysall, Associate Professor of Business Psychology at Nottingham Business School, emphasises the importance of regular, open, two-way communication between managers and employees.

She says these conversations should provide workers with honest performance updates, including how the broader company is doing and what, if anything, individuals can do differently to improve.

“If done regularly, then bad news should be no surprise, as employees will have been given opportunities to turn things around, assuming there were aspects within their control.”

Without frequent and frank communication about employee performance and the company’s health, she suggests delivering bad news – such as layoffs or negative performance appraisals – could feel sudden or surprising.

“Often, to avoid the discomfort these conversations tend to bring, such news is softened or sugar-coated to the extent where the message is unclear. So, people do not change their behaviour as a result. The consequence is that people aren’t given the opportunity to learn or turn around their performance, and ultimately trust is lost because when the situation inevitably gets worse, it becomes unavoidable to deliver bad news, and it comes as a surprise. As a result, people tend to feel resentful and angry.”

Never delegate pain – be present for frustrated employees

Building this kind of open communication with employees means being transparent about the reasons behind difficult decisions. Marjo-Riitta Diehl, Associate Professor of Management Studies at Aalto University School of Business, says it is easier to communicate and receive bad news if the measures are justifiable as part of a strategic plan, especially in the case of layoffs or pay cuts.

In these situations, she says managers should volunteer the most pressing information as soon as possible and walk straight into adversity.

“The affected individuals have the right to know the facts fast, first, personally, and accurately. Pain should never be delegated, meaning that those in charge of the decision should be there to meet the affected individuals. Possible employee grief, anger, or bewilderment must be faced personally and respectfully.”

Simply listening and giving employees time to digest bad news is important, she says. Further support should then be offered where possible, such as outplacement services or retraining opportunities in the case of layoffs.

“Pain should never be delegated, meaning that those in charge of the decision should be there to meet the affected individuals.”

Marjo-Riitta Diehl, Associate Professor of Management Studies at Aalto University School of Business

For negative performance appraisals, she suggests the reviewer and reviewee should agree on future performance standards, how they will be measured, and what help is available to the affected employee so they can perform as expected in future.

Seeking a constructive way forward for all concerned is crucial because, as Diehl points out, bad news has a wide ripple effect beyond those directly affected.

“Other employees who witness the situation – e.g., layoffs – are likely to suffer too, and there is a risk that they voluntarily leave the organisation. Consequently, at the same time as the organisation is sharing bad news with some of their employees, they should take particular care of those employees whom they wish to retain,” she says.

There is an element of truth in this fear. Many people will recall news of the widespread job cuts at major tech companies throughout 2023. In this climate, research from software specialist Ivanti revealed IT professionals were 1.4 times more likely to “quiet quit” than other knowledge workers.

In short, senior leaders must be careful that, in letting go of a select group of people, they do not cause widespread alienation that could lead to a mass exodus or lack of engagement among remaining workers.

Demonstrate integrity – show your decisions are value-driven

Open and honest communication is essential to keeping workers on side. This strategy should be rooted in the company’s values. Eric Yuge Lou, Assistant Professor of People and Organizations at NEOMA Business School, succinctly sums up this approach as maintaining integrity.

“While prior research has shown that trust is important in difficult times, our research shows that, for the first time, integrity is becoming increasingly important for organisations to build much-needed resources in communications,” he says.

“Integrity is becoming increasingly important for organisations to build much-needed resources in communications.”

Eric Yuge Lou, Assistant Professor of People and Organizations at NEOMA Business School

According to Lou, there are various ways to demonstrate integrity depending on the situation, but at its core, integrity is about behaving in a principled way. He explains this means using value-laden rhetoric when communicating with employees, behaving consistently and according to values that stakeholders find acceptable, and showing that senior leaders assign importance to contentious issues.

“Applying this principle to layoffs – highly probable in a crisis – leaders should provide clear explanations and reasons to keep employees informed, and the reasons should be tied to serving the overarching organisational purposes, e.g. to better ensure stakeholder values, rather than being about keeping the bottom line.”

Set an example – how one company responded to COVID-19

As an example of this behaviour in action, Lou indicates steps taken by Arne Sorenson, the late and former CEO of Marriott International, during the COVID-19 pandemic.

Faced with a global downturn across the hospitality sector, Marriott was forced to close hotels, reduce executive team members’ salaries, and downsize its workforce.

In a video message posted to social media, Sorenson was frank about the reasons for these decisions. He explained the company was witnessing business running 75 percent lower than normal levels across most of the world and therefore that tough decisions had to be made. He expressed his sympathies to workers affected by a crisis beyond their control and revealed that he would not be taking any salary for the balance of 2020, demonstrating his willingness to also make personal sacrifices.

Through his actions, Sorenson created a sense of solidarity with impacted workers – and herein lies the key: employees are people who want to feel seen and valued. Many of the challenges that can arise when breaking bad news are due to wider communication and management problems, such as viewing workers as statistics rather than individuals. The process by which senior leaders and HR professionals engage with the workforce needs to be humanised.

When senior leaders consistently show that they care about their employees by treating them as valued members of an organisational community, they foster a sense of commitment and belonging.

This makes it much easier to have honest – sometimes brutally so – conversations and announce bad news. Employees have the necessary information to process their situation and feel supported in taking their next steps, whether this means working on their performance targets or taking an opportunity to retrain so they can find another job.

The secret is simply strong communication. Demonstrate openness, honesty, and integrity. Listen and be willing to provide support to help employees envision what comes next for them. They will thank you for it.

Interested in this topic? You might also like this…