Employee Relations Financial Crisis Managing Employee Relations
Employee relations can often be a difficult aspect of maintaining the overall health of an organization. In general, employee relations often refer to the act of fostering productivity, motivation, and employee morale in an organizations human resources pool. However, there are some circumstances in which it is virtually impossible to maintain high levels of morale. One example of this is during a period of economic turmoil. During the global financial crisis of 2008, the world's economy took a sharp turn for the worse. This economic downturn had many implications for businesses and their employees. The level of unemployment rose quickly in many nations and pressure was also applied to lower employee wages.
An analysis of Enron's organizational behavior
Enron collapsed very quickly in November 2001, and its failure should have been a warning to serious dysfunctions in the entire corporate and financial system, but this did not happen. Its executives admitted that they had falsified its records going back for at least five years, although in reality they had been doing so since the 1980s. When the company filed Chapter 11 bankruptcy it laid off over 20,000 workers and at least $24 billion in pension assets, stocks and mutual funds also vanished (McLean and Elkind 2003). In addition, the Arthur Anderson accounting firm that had been complicit in covering up the fraud and embezzlement at Enron for many years, also went out of business. This catastrophe also demonstrated that Wall Street banks, stock analysts and ratings agencies had either been deceived or allowed themselves to be deceived by Enron when they continually painted a positive picture of the company and its future prospects. Later in the decade, the exact same problem would occur with the banks and investment firms that were marking ‘assets' of dubious values like subprime mortgages.