Double and Triple Check

This is a bit outside our normal blogging, but it showed just how important it is as an employer to check everything. It doesn't matter if you have one employee or thousands, check everything!

The financially struggling Northwest Airlines recently made a blunder that could easily be viewed as a sequel to "Snakes on a Plane."

The Eagan, Minn., company, which is in the midst of bankruptcy reorganization, did something that was as biting to some of its employees as the plane full of poisonous snakes in the recently released movie.

To help prepare employees for possible job losses or transitions, Northwest sent out a 165-page handbook titled "Ground Operations Restructuring Q&A and Employee Support."

The guide included information on pension and retirement benefits, relocation and résumé assistance, said Roman Blahoski, media relations manager for Northwest.

Now, this isn't bad so far. The company is struggling and knowing it is going to either fire some employees or severely reduce their salary, it is trying to help them get ready. What followed next is what was so appalling.

Northwest rattled some employees because of one section in the handbook, "Coping With Job Loss." In that section was a list of "101 Ways to Save Money" that was not reviewed by Northwest management, according to Blahoski.

Now, remember, this was given to employees, some of whom might be losing their jobs by no fault of their own. Here's some of what they were told:

· Buy spare parts for your car at the junkyard.

· Get hand-me-down clothes and toys for your kids from family and friends.

· Take a shorter shower.

· Buy old furniture at yard sales and refinish it yourself.

· Volunteer two hours a month at a food-sharing program to get reduced-cost food.

· Hang clothes out to dry.

· Borrow a dress for a big night out or go to a consignment shop.

· Ask your doctor for samples of prescriptions.

· Don't be shy about pulling something you like out of the trash.

Excuse me? You are a company that is failing financially and you have the gall to tell a former employee to go dumpster diving? What could they have possibly been thinking?!?

They also gave some ridiculous tips that, if you don't know a person's exact financial situation, could cause more harm than good.

For example, tip No. 41 said, "Refinance your mortgage." What? When was this list prepared? Although dipping a bit lately, mortgage rates have been seesawing all over the place and have mostly been rising.

Another tip (No. 44) said to convert your cash-value life insurance to term. That one-sentence suggestion needed far more explanation. I certainly wouldn't recommend this without explaining the pros and cons.

What if employees had just bought a cash-value policy? It's probable they would encounter a huge surrender charge. A surrender charge is what you have to pay if you withdraw money or cancel the policy within a certain period after your purchase (typically within six or eight years, but sometimes as long as 10). The policyholder could also trigger a tax hit on earnings. That, too, wasn't explained.

The list also advised people to trade in their cars for less-expensive, lower-maintenance ones. Okay, but what if you're upside-down on your car, meaning you owe more than the car is worth? Trading in a car in such a situation would cost an employee more money.

Tip No. 87 said to donate time instead of money to religious organizations and charities. Well, what if you believe in tithing?

As employers ourselves, it was a good reminder of what can go wrong when something is put out in your name that you didn't review. We're sure some heads are going to roll over this kind of blunder!