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By Eve Tahmincioglu
msnbc.com contributor
updated 3/28/2011 2:50:45 PM ET 2011-03-28T18:50:45

In late 2008, Frank Kneller, the CEO of RainSoft, knew he’d have to lay off 25 percent of his work force but made the decision to wait until after the Christmas holiday to make the cuts. The decision was not popular with his board, which wanted immediate staff cuts.

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Kneller personally made the announcement to his workers about the layoffs. They went into effect on Jan. 5 at the water-treatment equipment company, based in Elk Grove Village, Ill., after communicating directly with employees about the company’s economic condition during monthly town-hall type meetings.

During the layoff meeting, he was visibly upset, even crying as he hugged an employee who lost her job and apologizing to others who were in the same boat. He also chose not to deny computer access to laid-off workers right away, and gave them time to clear their desks and talk to friends instead of having them escorted from the building.

“People appreciate when you show you care,” he explains about his actions, which may sound like corporate layoffs no-nos. “Some people think you shouldn’t be empathetic. I say you need to be. It’s about being human.”

There’s been a lot of talk about the merits and drawbacks of empathy lately following the nomination of Sonia Sotomayor to the Supreme Court. Many have questioned whether a judge with empathy for others, something President Obama has touted as a virtue, would hinder how well she can perform the job of justice.

But does empathy make sense in any job? What about in Corporate America, especially given the tough economy and the cutthroat competition?

It's not ‘all touch-feely’
“Empathy has gotten a bad rap in the last 25 years in business,” says Dev Patnaik, author of “Wired to Care: How Companies Prosper When They Create Widespread Empathy.”

The best organizations and the ones that survive economic tsunamis, he says, are those with empathetic cultures and managers who are able to step outside themselves and walk in someone else’s shoes.

It’s not about being all touchy-feely. “It’s about having intuition and a gut feeling for other people,” he explains.

Turns out, there are positives and negatives when it comes to empathy at work. If you can find the right balance it will only bode well for your company and career, says Judith Orloff, MD, an assistant clinical professor of psychiatry at UCLA and author of “Emotional Freedom: Liberate Yourself from Negative Emotions and Transform Your Life.”

“Empathy is the most beautiful quality in human nature,” she stressed. “With it, you can have a deep respect for other people and insight and caring that gets communicated in the workplace as opposed to just going by the rules and not being sensitive to human needs.”

On the down side, she added, “is becoming overwhelmed by it, especially in this economy.” And that, she says, will keep you from doing what you need to do at work.

“Empaths,” as she calls them, are prone to anxiety, depression and fatigue because they take all the pain onto themselves.

The key, she advises, is realizing your limitations when it comes to helping those around you. “Don’t have illusions you can save the world,” she maintains.

Way of the dinosaur
A little workplace empathy can go a long way and reap great rewards, experts agree.

Indeed, Kneller’s behavior at RainSoft during the downsizing seemed to get him a loyalty boost.

Moises Garcia, who does production planning and has been with the company for four years, says: “It’s a breath of fresh air when a CEO is out there in front of everybody and shows he actually cares. In general, people are more loyal now.”

“We see that he cares and we try to work with him,” adds Edyta Otkala, a RainSoft receptionist.

Alas, empathy may be going the way of the dinosaur. There’s been an alarming number of workers who think their managers and organizations don’t care about them and that’s impacting the work they do.

Research from the Corporate Executive Board shows a 3 to 5 percent reduction in productivity in the first quarter of this year because employees feel their managers do not have their interest in mind and because employees don't value or enjoy their jobs or management.

For decades, says Patnaik, individuals have been expected to suppress emotions and think, “it’s just business. It’s not personal.” Well, he adds, “You leave all your instincts behind as well.”

General Motor’s former CEO Rick Wagoner, he says, “is the classic example of a CEO who lost empathy. The destruction of the American auto industry was a train wreck and he was completely out of touch.”

Too many CEOs are out of touch with their workers, customers and suppliers because they live in the bubble of boardrooms, corner offices and make decisions based on Power Point reports, he maintains.

Patnaik has something called an Empath-O-Meter on his Web site, WiredToCare.com where he allows readers to rate the empathy levels at their companies.

The three with the highest empathy ratings:  Commerce Bank, Harley-Davidson and IBM.

The three with the lowest ratings: Citibank, Delta Air Lines and Kraft.

“Businesses have gotten out of touch with reality,” he stresses. “Empathy is about getting in touch with reality.”

Layoffs vs. other cuts
Sometimes making the empathetic decision may not always be the best business decision.

Take John Brown, president of Primary Freight Services, a shipping and logistics company in Rancho Dominguez, Calif.

Brown saw his family-run firm’s revenues drop 24 percent last year and despite many of his competitors slashing 30 percent of their workforces he decided to buck the trend. He chose instead to cut executive pay, including his own, and moved his staff to a four-day work week, thus saving 18 jobs and medical coverage for his employees.

“It would have been a lot easier to look better if I laid off staff,” he says about his company’s balance sheet.

“But service is all I have,” he explains. “If I took away the core of what I have I would have taken away from what made the company successful in the first place — my employees.”

To boost morale, the company has instituted a Wii bowling tournament with cash prizes that kicks off June 22 and will include workers at headquarters and offices in Chicago and Union, N.J.

Workers were asked to build avatars of themselves and the management team, and the whole process has taken some of the doom and gloom out of the company’s present situation. “I haven’t heard so much laughter in a while,” he points out.

Michelle Perez has been the warehouse supervisor at Primary Freight for a year and a half and expected layoffs when the downturn in the economy started to impact the company but was pleasantly surprised at the steps Brown took to keep jobs intact.

“It helped the morale of everybody to know they care,” she says. “They appreciate employees and that makes us want to go above and beyond everyday.”

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