Crisis refer to unplanned events which cause harm to the organization and lead to disturbances and major unrest amongst the employees.
Crisis gives rise to a feeling of fear and threat in the individuals who eventually lose interest and trust in the organization.
Crisis Management Model
Gonzalez-Herrero and Pratt proposed a Crisis Management Model which identified three different stages of crisis management.
According to Gonzalez-Herrero and Pratt, crisis management includes following three stages:
Diagnosis of Crisis
The first stage involves detecting the early indicators of crisis. It is for the leaders and managers to sense the warning signals of a crisis and prepare the employees to face the same with courage and determination. Superiors must review the performance of their subordinates from time to time to know what they are up to.
The role of a manager is not just to sit in closed cabins and shout on his subordinates. He must know what is happening around him. Monitoring the performance of the employee regularly helps the managers to foresee crisis and warn the employees against the negative consequences of the same. One should not ignore the alarming signals of crisis but take necessary actions to prevent it. Take initiative on your own. Donâ€™t wait for others.
Once a crisis is being detected, crisis management team must immediately jump into action. Ask the employees not to panic. Devise relevant strategies to avoid an emergency situation. Sit and discuss with the related members to come out with a solution which would work best at the times of crisis. It is essential to take quick decisions. One needs to be alert and most importantly patient. Make sure your facts and figures are correct. Donâ€™t rely on mere guess works and assumptions. It will cost you later.
Adjusting to Changes
Employees must adjust well to new situations and changes for effective functioning of organization in near future. It is important to analyze the causes which led to a crisis at the workplace. Mistakes should not be repeated and new plans and processes must be incorporated in the system.
Structural Functions Systems Theory
According to structural functions systems theory, communication plays a pivotal role in crisis management. Correct flow of information across all hierarchies is essential. Transparency must be maintained at all levels. Management must effectively communicate with employees and provide them the necessary information at the times of crisis. Ignoring people does not help, instead makes situations worse. Superiors must be in regular touch with subordinates. Leaders must take charge and ask the employees to give their best.
Diffusion of innovation Theory
Diffusion of innovation theory proposed by Everett Rogers, supports the sharing of information during emergency situations. As the name suggests during crisis each employee should think out of the box and come out with something innovative to overcome tough times. One should be ready with an alternate plan. Once an employee comes up with an innovative idea, he must not keep things to himself. Spread the idea amongst all employees and departments. Effective communication is essential to pass on ideas and information in its desired form.
Unequal Human Capital Theory
Unequal human capital theory was proposed by James. According to unequal human capital theory, inequality amongst employees leads to crisis at the workplace. Discrimation on the grounds of caste, job profile as well as salary lead to frustrated employees who eventually play with the brand name, spread baseless rumors and earn a bad name for the organization.