Saturday, June 27, 2009

McKinsey proposes FART approach to employee unrest

McFartMumbai. McKinsey and Co., the global leaders in management consultancy, have proposed a new framework for companies dealing with employee unrest in wake of the ongoing economic downturn. The framework, published in the visitor edition of The McKinsey Quarterly, advocates a four-pronged approach called FART to deal with the dissatisfaction among employees arising out of cost-cutting measures taken up by companies.

FART stands for Feed, Affect, Relegate, and Terminate – four different approaches that a company should take based on mix of two parameters – existing 'Employee Mindset' and the 'Cash Status' of the company. The McKinsey Quarterly report elaborates each of these four approaches of the FART framework with several exhibits to back up the study.

“If the company has a bit of cash and the employees’ mindset is still to turn hostile, the company should ‘feed’ the employees to stop them from turning hostile. The best way to ‘feed’ is to give some freebies like season gifts, personalized cakes on birthdays, shopping coupons, free pizzas during working hours, etc.” the report explained the ‘feed’ approach of the FART framework.

In case employees’ mood has turned a bit hostile and some of them are demanding explanations about issues like salary hikes and promotions, the FART framework suggests ‘affect’ approach for companies with surplus cash. ‘Affect’ approach requires the company to affect i.e. pretend taking some proactive steps for employee welfare.

“The company could initiate a pretentious performance appraisal process to quell the employee unrest. Other steps could involve sending the employees a feedback form, or inviting employees for a one-to-one interview with HR executives, etc. Such steps mollify the hostile mood of the employees, giving them a hope about future, but these steps should be taken only when the company has some cash to meet the expenses associated with these affected steps.” the report elaborated.

If a company doesn’t enjoy the luxury of surplus cash and is running into losses, the FART framework advocates ‘relegate’ approach, but only if the employees are in a friendly mindset, which is rare in normal course. The approach involves taking steps like lowering the compensation packages and demoting the employees. The report describes the ‘relegate’ approach as being a transient approach as it usually ends up changing the employee mindset from friendly to hostile, leaving the company to adopt the forth and the final approach – terminate.

“If the company is running into losses and employees have turned hostile, the best approach is to ‘terminate’ i.e. fire the employees.” the report concluded the FART framework.


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