How HR Manage the Negative Effects in Crisis Management

October 15, 20193:36 pm892 views

What is crisis management?

Crisis management is a process by which an organisation deals with disruptive and unexpected events that could harm business operation or its stakeholders. There are three elements of a crisis, namely threat, surprise, and wrong decision-making. 

The result of negligence in managing a crisis can be severe to a business. For instance, a company can be tossed from the Google review site, negative media coverage and news that might eventually force the business to shut down.

See also: More CEOs are Leaving Their Job Now than They Did after Financial Crisis

Examples of crisis management

A recent example of a business crisis came from the global fast-food restaurant chain, KFC. In February 2018, KFC had to temporarily close more than half of its 900 stores in the UK due to a shortage of chicken. The cause of the shortage, according to the news, was because of the chicken delivery issue which happened after the company switched its contract to DHL. Responding to the matter, loyal customers tweeted unpleasant comments on Twitter and took their families to McDonald’s. Some even complained to their local politicians.

In handling the disruption, KFC wrote a sorry statement to its social media platform for the inconvenience. Richard Wilding, professor of supply chain management at Cranfield School of Management, added that KFC also needed to rebuild their confidence with its customer base because most people are missing the point by focusing on just the restaurants. Only some to none gave further thought on KFC farmers or system that was probably broken at that time. 

“When you get well known for what you do, the media will want to interview you, which is a good way to get your message out of alternatively, to look really bad.” – Craig Newmark

That being said, without smart response from the company, poor crisis management can interrupt business operation, damage reputation, or both – with consequent on the bottom line.

How should HR anticipate and deal with the crisis?

Technology could be a good answer as it allows crisis managers to respond faster, more efficiently, and with instant worldwide impact. Technology is beneficial to virtually project themselves anywhere in the world, adding some real effect and non-verbal communication to long-distance contact. But while the technology will change, the principles will remain the same. 

Therefore, human resource team should develop a plan to anticipate and deal with a crisis that likely occurs in the future to avoid its negative consequences. How to do that? Here are 4 simple tips HR can apply.

1. Develop a plan

Foremost, planning is important as it allows HR managers to predict types of crisis that will likely occur in the future. By having conscious of “predicted crisis”, thus, HR managers can identify assessment needed to abolish negative rumour that will happen.

According to Jonathan Bernstein in his survey, HR managers should work collaboratively with key organisational functions. The outcome of the plan should cover: emergency response plan, crisis communication plan, business continuity plan, and IT plan.

2. Organise crisis management team

Handling a crisis by HR manager alone can be a pain in the neck. Therefore, forming a team is what HR should do. The team is responsible for formulating policies that will be followed during the crisis, wrote Bernstein. In addition, the team should be composed of all internal executives, including head of departments, line managers, and human resource representative as they have the ability to handle people.

3. Manage communication

During the disaster, HR team should actively update their information about employees and stakeholders, ensuring that they are safe from the disruption of the crisis that happened. Communication during crisis management also ensures the effectiveness of emergency situation because any event that affects the operations of a business needs to be managed well.

Novid Parsi in his article mentioned that employees bring important voices during a crisis. They can make or break the news into either positive or negative rumour. Thus, HR managers should make sure the internal team first before the external environment.

4. Recover phase

The result of disaster will affect either psychology or physics of internal organisation which might demoralise employees and stakeholders. In this case, the HR team should help them get back on their feet. Conducting re-training that focus on employees’ psychology is needed. The HR team can work together with professional in this matter to help lit back the lights that dimmed due to crisis.

Read also: Exclusives: Importance of Crisis Communication to Keep Employees Motivated During Times of Intense Scrutiny