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“How firms treat their employees, especially during a crisis such as the Coronavirus, will affect how consumers view their reputation. Based on our research, internal policies and procedures related to employee treatment are more valued by the public than philanthropic activities."”
Companies across the country are dealing with unprecedented decision-making in the face of the COVID-19 pandemic. Whereas it is fairly clear-cut as to what companies do to support full time employees, it is much more difficult for companies to determine how to handle their workers who function in many vital capacities for businesses. These workers provide security, service the facilities, work in cafeterias, shuttle employees, etc., and the Center for Disease Control and Prevention is recommending that companies not create a disincentive that would have, potentially, sick workers at work to get paid.
How firms treat their employees, especially during a crisis such as the Coronavirus, will affect how consumers view their reputation. Based on our research, internal policies and procedures related to employee treatment are more valued by the public than philanthropic activities. It’s laudable that Google pledged $25 million in advertising credit to the World Health Organization, but how it engages in ethical conduct is much more important to the key stakeholders of a company.
Based on the 2019 Edelman Trust Barometer, employees trust their employer to “do the right thing” related to their welfare and wellbeing. In fact, 75% of employees indicated they trust “my employer” above non-governmental organizations, business in general, the government and the media. The public will be greatly influenced by how companies treat all workers, not just full-time employees.
The COVID-19 pandemic is an opportunity for businesses to increase the trust and loyalty
of their employees and translate that into greater consumer trust of their company
and brands. When we come out of this period of economic uncertainty, the companies
who treat their employee with integrity and high standard of ethical conduct will
retain and attract the best employees.
We can look to what an increasing number of major companies are doing to address this issue for evidence of best practices in action.
According to the Washington Post, Google and Facebook will continue to pay their contingent workers and will apply their policies for contract employees to them. This decision will keep these workers ‘whole’ and not cause them to leave for another job to pay the bills. Google has also extended these policies to work with temporary workers and vendors to make sure that their normal compensation would be covered.
Amazon is making the same commitment to all hourly employees and subsidizing the rent for local, small businesses that operate inside their corporate headquarters. These businesses would have no business with Amazon workers at home. These commitments can be very large, for example, Google contractors totaled around 121,000 whereas regular employees were just over 100,000.
Microsoft will pay its 4,500 hourly workers their normal pay, even if their services are not required during work at home transitions. Apple, too, has committed to paying unlimited sick leave for workers experiencing COVID-19 symptoms.
The gig economy provides some unique challenges as these workers are independent contractors and not employees of the company with full benefit packages. Uber and Lyft have indicated a commitment to helping their contractors engage in ‘social distancing,’ not engaging in work that requires direct contact with a customer or another employee who has the virus. Both companies have said they will compensate workers who need to be quarantined or contract the virus.
It is estimated that 70% of low wage workers do not receive paid sick leave, according
to the Bureau of Labor Statistics. According to USA Today, Darden, the parent company of Olive Garden and Long Horn Steak House, indicates
that it is offering one hour of sick leave for every 30 hours of work.
These examples of smart companies stepping up and talking action to dampen the impact of the coronavirus on their employees, putting short-term sales and profits on the back burner in favor of taking clear and compelling action – directed from the top – will serve them well in the long run.
Ethical behavior – not just words or corporate social responsibility initiatives (valuable as they are…) -- build strong relationships with both employees and partners that will be appreciated by customers as well.
Linda Ferrell is Professor and Chair of the Marketing Department at the Harbert College of Business. O.C. Ferrell is the James T. Pursell Eminent Scholar in Ethics and Director of the Center for Ethical Organizational Cultures.