In late 2001, YSI, Inc., like many companies facing economic uncertainty, imposed a salary freeze on its U.S.-based employees. By spring, as the economic outlook brightened, undercurrents of concern began emerging among employees. How long, many wondered, would the freeze be left in place?
Allowing such issues to fester can be highly destabilizing, feeding rumors and speculation. At YSI, an Ohio-based manufacturer of testing equipment for the water, life sciences and process control industries, managers and employees can rely on the Employee Owners Council (EOC) as a crucial safety valve to let off steam and generate honest communication. The EOC comprises 16 units of 10 to15 employees, each with an elected representative who meets every four to six weeks with the company president and/or CEO.
Each EOC representative must report back to its members in a timely manner. Last April, at the urging of the EOC leaders, senior management agreed to draft a formal policy to address the salary issue and use the EOC as a sounding board for feedback and refinement. "We initiated the action," says Susan Miller, company secretary and an EOC leader who's been elected to a two-year term. "Management was willing to lay themselves on the line and answer what were sometimes uncomfortable questions."
YSI is a $57 million, employee-owned company with nine sites in the United States and abroad. The company has long prided itself on building a deep-rooted culture of open communication and employee support and recognition. For instance, there is a two-week orientation program for new employees, which has grown in length and scope in response to new-employee surveys. In addition, the employee-of-the-year award is tied not just to performance, but also to openness, work/life balance and community involvement.
However, even the best-intentioned companies can sometimes grow out of touch. At YSI, the EOC is a direct outgrowth of employee feedback and a 2001 company-wide survey designed to find a way to re-energize the true spirit of company ownership. "There was a feeling that the relationship had become too one-sided – that employees enjoyed rights without the responsibilities of providing ideas and questions to management," says Rosalie Catalano, vice president of stewardship and human development.
Now, the EOC, with its upward communication, helps support the quarterly meetings between president, CEO and employees, which provide information on financial performance and new company developments.
The importance of the EOC was underscored in early 2002 on an issue that touched the soul of the company. Though YSI prides itself on its environmental stewardship, the company became embroiled in a groundwater contamination problem in its own backyard. While the source of the contamination hasn't been confirmed, the company has reached out to assist local residents and cooperate with state regulators. However, a drafted "open letter" to the community from a team of employees began to generate concern among a few colleagues. If they signed it, would they be personally liable to any future claims? Was there pressure to sign?
Management turned to the EOC. Each EOC leader met with his or her unit and provided a forum for employees to talk through their concerns with the letter. "By talking in small groups, it gave people time to think and discuss," Catalano says. Miller adds that "It helped us understand the immensity of the problem." In the end, more than three-quarters of the workforce agreed to sign the letter, which was then published in local papers.
The EOC has reinforced some basic principles and provided some key lessons also common to other organizations. Without the total support of company leadership, communications and employee involvement programs can sound hollow.
It can be a challenge to generate participation from all employee forum members. The process of open communication can take time and delay decision-making. However, there is a payoff. "The sense of empowerment and buy-in you get far outweighs any of those problems," Catalano says. "The majority of our workforce is loyal, invested, and committed, and our productivity is rising."
Company: YSI, Inc.
Web site: www.ysi.com
Industry: Technology
Location: Yellow Springs, Ohio
Number of employees: 370
Sales: $57.4 million (2001)
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