'Family feud in firms affects staff morale'

Family feuds and splits at the board level affect the morale of the employees with the latter wasting more time on searching jobs than actually working, according to Mahan Tavakoli, vice-president of Dale Carnegie Training.

"The management should focus on proper communication methods, particularly when there is a crisis at the managerial level. Employees feel insecure about the growth and functioning of companies and this leads to high attrition rates," Tavakoli told Business Standard.

Recently, there have been several feuds based on ownership issues like the Birla-Lodha case and the rift in the Ambani family. Others like the DCM group and Walchand Group also saw churning.

Such incidents can lead to a communication gap. Therefore, companies going through such a phase should take the employees into confidence, Tavakoli said.

"It is very important for the CEOs to explain the situation and also chalk out the ownership rights and anticipated growth path of the company to the employees. If this does not happen, we see a huge fallout in terms low employee productivity and high attrition rates," he said.

"There have been cases in the US where big conglomerates suddenly witnessed attrition rates of nearly 40 per cent and companies could not contain the outflux," Tavakoli added.

Pallavi Jha, chairperson and managing director of Dale Carnegie, India, said that not only big conglomerates, even business process outsourcing (BPO) units like GE and Wipro Spectramind face issues of consistency among employees because of a lack of communication.

"Most companies think a good e-mailing system tantamounts to good communication with employees. However, with so many people being employed, companies should look at engaging employees more in company affairs and push the decision-making downwards," Tavakoli said.

He said most BPOs confused themselves with just training institutions where processes were taught and this dissuaded employees from continuing to work.