March 7th, 2013

JCPenney’s toxic workplace culture exterminates and color codes employees

Ron Johnson became JCPenney CEO on Nov. 2011. Since then, he has purged all of the former executives and 1900 corporate HQ employees at Plano, Texas. The company has also cut 19,000 store employees. In his first year, store sales fell 23%. Penney stock shares fell 62% over the past year. So much for his ambitious turnaround plan.

HQ employees loathe and fear him. Now he launches a new plan to eliminate store workers by color code.

Johnson (who invented the Genius Bar at the Apple Store in his previous job), lives in Palo Alto, CA and commutes on the company jet for Monday through Thursday stints at Plano HQ. While there, he stays at the Ritz-Carlton Hotel in Dallas about 25 miles away (certainly at company expense). His compensation is modest by CEO standards — salary and cash bonus total $611,000 — with the prospect of $52.6 million in stock earnings (though that is halved when stocks plunged). The Ritz is also home to Manhattan-based exec Nick Wooster, also a Monday-Thursday kind of guy. These traveling execs are credited with fostering a new culture at JCP HQ of distrust and fear.

This failing “turnaround team” has now instructed store managers to categorize staff. Vice President and “transformational talent leader” (what kind of b.s. euphemism is this for personnel?) Michelle Steiz mandated grading and color coding.

• Red employees are those to be removed from the company
• Yellow employees are to be coached up or out
• Green employees can stay and “go forward”

Store managers were told to “be prepared to make decisions” in the coming months.

In a pre-Johnson regime move, JC Penney purchased 114 web domain names that make it appear that “JCP intends to suppress dissent and/or discussion and/or organization of the opposing voices by any and all means.” Domains such as BOYCOTTJCP.COM, BOYCOTTJCP.NET, BOYCOTTJCPENNEY.COM, BOYCOTTJCPENNEY.NET, JCP-LABOR.COM, JCP-LABOR.NET. Looks like pre-emptive union busting.

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Tags: culture of fear, JC Penney, Nick Wooster, Ron Johnson, terminations, turnaround, workplace bullying

This entry was posted on Thursday, March 7th, 2013 at 12:34 pm and is filed under Employers Gone Wild: Doing Bad Things. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.