Don’t shield workers from bad news during a downturn. It’s important to keep them involved in the business or else risk a backlash
The MGM Grand is well-known in academic and consulting circles for its focus on engaged employees. Charles A. Scherbaum, an associate professor in the psychology department at Baruch College, City University of New York, praises the company and Aziz for understanding the payoff from stimulating its 10,000 employees. “There are a lot of great hotels in Vegas,” says Scherbaum. “What’s going to differentiate MGM Grand? It’s service, and that’s the employees.”
For Scherbaum, the test for MGM Grand and all employers comes now, in the downturn. Will they maintain their commitment to their people, or change their tune and anger employees used to being heard? “In more difficult times, employee engagement is more critical,” Scherbaum says. “Managers have to make a lot of negative decisions with real impact on employees. [For the MGM Grand,] 96% occupancy won’t continue. What’s going to happen when they have to cut back on staff?”
Historically, management that have worked to engage employees in good times often tried to shield them from bad news in a downturn. That’s a big disappointment to staff that’s used to being involved deeply in the business, Scherbaum says. He advises companies with engaged work forces to keep right on with these policies or risk a backlash.
Aziz agrees and has worked to keep employees aware of the challenges, including the broader capital crisis, group cancellations, and the fact that guests are not spending as much per visit. Every challenge he faces in the corner office, the rank and file is aware of on some level, the CEO says.
But for all the right moves Aziz has made, Scherbaum thinks his decision to cut funding for some of his leadership initiatives is a mistake that could prove short-sighted. The MGM Grand may have enough qualified managers now, but “they run the risk of having a dearth when things rebound and they really need them,” he warns.