How One Executive Rewards Trip Damaged Employee Trust

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Mar 3, 2014

This story isn’t new, but the lessons to be learned, sadly, still plague us.

Benjamin Moore, one of the companies in Berkshire Hathaway’s stable, made headlines for something that could have very easily been avoided.

Berkshire Hathaway officials came to Benjamin Moore’s headquarters, gave the CEO Denis Abrams his walking papers, and escorted him from the building. It was newsworthy enough that it was reported in the New York Post and other media

A questionable rewards trip

The reason? According to The Post, it was because in 2012, Abrams took a group of Benjamin Moore executives on a company paid yacht trip in Bermuda to celebrate a rise in quarterly sales — the first since 2007, and after the company had suffered through five years of shrinking sales in the wake of the housing market collapse.

Berkshire’s corporate response initially was quiet, but a few days later, Buffett publicly disagreed with the Post‘s version of events and said the decision to replace Abrams “was based on a differing view about distribution channels and brand strategy.” The New York Post, however, stuck by its story.

The Bermuda trip was said to have upset rank-and-file Benjamin Moore employees, who had been through multiple layoffs, cuts in sales commissions, and frozen salaries over five years of tough times during the Great Recession and its aftermath. No doubt the “survivors” had to double up on their workload, too.

Top management’s focus

Let’s focus on Benjamin Moore’s total lack of sensitivity by top management to the company’s workers. Because of their actions, company culture took a nosedive — and t was probably already low to begin with.

What did top management do at the first sign of profit and a business turnaround? Reward themselves with a yacht party in Bermuda.

Employees got zip, zilch, nada.

What were these Benjamin Moore executives thinking? Did they even think about it at all? It’s not like the employees hadn’t had a tough time, too. Did the executives not appreciate their employees’ work? Did they even care?

If top management had just taken the time to think before acting, maybe they could have avoided adding insult to injury. All it would have taken was some gesture or something positive to recognize and show appreciation to employees who did the day-to-day work that kept the company going through the really tough times.

Losing trust in a hurry

Upper management could still have had their “executive outing,” but maybe at a resort closer to their New Jersey home offices instead of a yacht trip in Bermuda. There’s no reason they should not be rewarded, but it needed to happen in a manner that was a lot less “showy” — and, after recognizing their employees who worked and sacrificed first.

The new CEO brought in to replace Denis Abrams, told workers he aimed to beef up compensation for high-producing sales reps and recognized all the hard work that all employees had done over the difficult five-year period.

Still, some Benjamin Moore employees are skeptical after experiencing years of ruthless cost cuts.

There is a saying that is appropriate here: “Trust takes a long time to build, but seconds to lose.”

What do you think?

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