As you may know, Target recently closed all its stores and left Canada. You might have been one of the many shoppers to scoop up a deal on the liquidation sales. Future Shop also recently announced a consolidation into Best Buy with a closure of 65 stores and a conversion of 66 stores into Best Buy locations. Which company treated their employees better? Which company was effective in managing employee morale during such a turbulent time?

Target started out by announcing their closure early in the process and allowed their employees to digest the information. The company also set up a severance trust fund so that most of their employees would receive 16 weeks of pay. During a liquidation there is always a lot of uncertainty. As such, employees want to know that they will be taken care of as they are typically the last to be paid out after creditors. While Target explained the general process of liquidation to their employees, they did not divulge the specifics of their severance and the chaos to come, particularly during all the liquidation sales.

On the other hand, Future Shop employees came to work on a Saturday and were told that their jobs would be terminated and their store was either closing or being converted to a Best Buy. This was certainly not a good example of employee relations during a layoff situation. Employees were blindsided and unsure of how to process such traumatic information. After the announcement the company confirmed the elimination of 1,000 part time jobs and 500 full time jobs. Employees were then told that they would have to re-apply to positions at Best Buy, allowing the employer to pick and choose from the laid off employees.

Both companies informed their employees of the changes yet they had very different impacts on employee relations and employee morale. From these examples it is clear that employees want to fully understand the situation. Employers and managers need to communicate accurately and fully to their employees. Explaining why the merger or liquidation situation is happening and how the process will impact each individual is critical. A major merger can often be plagued by the rumor mill; it is essential to replace all the rumors with facts. While the facts may be unpleasant, employees appreciate having accurate information available quickly. It is also important for managers to be visible and available to answer employee questions and discuss what is on their mind.

So in the end, who got it right? Target certainly appears to have been more effective in communicating essential information early. They also dealt with the fallout better through a clear severance process. However, they struggled with some implementation issues during their final days in Canada. Overall, Target came closer to the mark than Best Buy.

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