The internet was abuzz on Monday with a story as shocking as it was bizarre. Yes Madam, a salon-at-home startup founded in 2016, allegedly fired over a hundred employees after they reported feeling stressed in a company-conducted survey designed to gauge workplace well-being. Rather than addressing the underlying causes of stress, the company reportedly weaponised the survey responses to single out employees deemed ‘problematic’.
Yes Madam, which competes with Urban Company and others in the home-service sector, had previously secured funding from high-profile investors on Shark Tank India. However, this incident highlights the ethical pitfalls that even innovative startups can stumble into when governance and empathy are absent.
Employee surveys are meant to identify organisational stressors and improve workplace conditions, not to punish honesty. Confidentiality is their cornerstone, fostering an environment where employees feel safe to share feedback. Breaching this trust not only undermines the survey’s purpose but sets a dangerous precedent.
“Many startups lack the processes needed to uphold ethical norms. Firing employees based on a stress survey not only violates these norms but showcases a lack of understanding of how to build a sustainable enterprise.”
Nihar Ghosh, senior HR leader
Praveer Priyadarshi, a senior HR leader, condemns the company’s actions: “The first principle of any survey is ensuring confidentiality and using feedback for corrective actions, not retaliation.”
Instead of fostering a culture of improvement, Yes Madam turned feedback into a weapon. Employees who were honest about their stress levels found themselves out of a job, a decision that damages morale and undermines trust within the organisation.
Startups often operate in fast-paced, high-pressure environments, but that does not excuse unethical practices. Governance structures are essential for holding leadership accountable and ensuring decisions align with organisational values. Unfortunately, startups like Yes Madam frequently lack the maturity to uphold these standards.
“Many startups lack the processes needed to uphold ethical norms,” says Nihar Ghosh, another senior HR leader. “Firing employees based on a stress survey not only violates these norms but showcases a lack of understanding of how to build a sustainable enterprise,” he adds.
“The first principle of any survey is ensuring confidentiality and using feedback for corrective actions, not retaliation.”
Praveer Priyadarshi, senior HR leader
Without robust governance, even well-meaning initiatives can spiral into reckless decisions. The Yes Madam case illustrates how an absence of oversight can transform a potentially positive exercise—gathering feedback—into an unethical act that harms employees and damages the organisation’s reputation.
Firing employees for reporting stress is both shortsighted and counterproductive. Stress is often a symptom of systemic issues, such as poor management, excessive workloads, or inadequate resources. Instead of addressing these root causes, Yes Madam chose a path that perpetuates the problem.
“Any organisation worth its salt should use feedback to identify and address workplace stressors rather than penalise employees for speaking out.”
Ramesh Shankar S, a seasoned HR leader
“Any organisation worth its salt should use feedback to identify and address workplace stressors rather than penalise employees for speaking out,” argues Ramesh Shankar S, a seasoned HR leader.
By ignoring the systemic issues that contribute to stress, the company risks a ripple effect among the remaining workforce. Employees may feel insecure, leading to higher attrition, reduced morale, and a toxic workplace culture.
Leadership maturity is crucial in navigating feedback and implementing solutions. Yes Madam’s approach reflects a retaliatory culture rather than one focused on improvement. Surveys are tools for growth, not instruments of punishment.
“This decision is blasphemous and unbecoming of HR and management,” says Shankar. “It highlights an immature understanding of how to manage human capital effectively.”
Such actions not only hurt employee morale internally but also tarnish the company’s external reputation. Potential recruits may view Yes Madam as a hostile employer, making it harder to attract top talent.
The Yes Madam incident serves as a stark warning for startups and established companies alike. Ethical lapses, particularly those involving employees’ well-being, can have long-term consequences on trust, reputation, and business sustainability.
“The very act of firing individuals who trusted the company with sensitive information contradicts the purpose of employee surveys,” Ghosh points out. Organisations must recognise that their success is tied to their people.
Surveys should be tools for identifying problems and fostering improvement, not punitive measures. Priyadarshi stresses this point: “This decision demonstrates a fundamental misunderstanding of effective people-management practices. Ethical leadership involves more than compliance—it requires a commitment to employee welfare.”
To prevent such missteps, companies must adopt governance frameworks that ensure transparency, accountability, and ethical decision-making. Addressing systemic issues, investing in leadership maturity, and fostering a culture of trust are essential steps toward building resilient and thriving workplaces.
Ultimately, success lies in embracing empathy and ethics as core principles. Anything less is not only unsustainable but also a betrayal of the very people who drive an organisation forward.