On March 13, 2001, Cerner Corporation CEO Neal L. Patterson sent an email aimed at some 400 company managers, intended to “start a fire.” The email spread, first through the organization, then beyond.

Patterson’s letter began like this:

We are getting less than 40 hours of work from a large number of our K.C.-based EMPLOYEES. The parking lot is sparsely used at 8 a.m.; likewise at 5 p.m. As managers—you either do not know what your EMPLOYEES are doing; or you do not CARE. You have created expectations on the work effort which allowed this to happen inside Cerner, creating a very unhealthy environment. In either case, you have a problem and you will fix it or I will replace you.

If you haven’t read the entire letter, you can find it here.

Today, nearly 13 years later, Patterson’s letter remains a shining example of how not to motivate employees. You have to wonder if PayPal CEO David Marcus (pictured above) missed the extensive coverage of Patterson’s letter and the blowback it produced (Cerner’s share price plunged 22 percent over concerns about employee morale) when he sent his email to PayPal employees.

Marcus’ memo was directed only to San Jose staff, excoriating them for not installing the PayPal app on their own phones or for forgetting their app passwords. (Rates of use in San Jose were, he said, lower than in other company locations.) “That’s unacceptable to me, and the rest of my team,” he wrote; “everyone at PayPal should use our products where available. That’s the only way we can make them better, and better.” Marcus didn’t stop with his demand that employees use the company’s product:

In closing, if you are one of the folks who refused to install the PayPal app or if you can’t remember your PayPal password, do yourself a favor, go find something that will connect with your heart and mind elsewhere. A life devoid of purpose, and passion in what you do everyday is a waste of the precious time you have on this earth to make it better.

Reporting of Marcus’s memo (which is reproduced in its entirety at the bottom of this article) has produced both support and condemnation. One employee told VentureBeat, “Most employees in my group reacted positively to the email and knew it was simply David wanting the passion he feels for the company to permeate across the entire organization.”

Passion at the top is understandable; it’s easy to see that a leader would want everyone to reflect his or her excitement about the brand. But expecting employees at all levels to reflect that same passion by virtue of the fact that they get a paycheck is an all-too-common leadership mistake. Take Cerner’s Patterson, for example. Or Shelly Lazarus, former chairman of Ogilvy & Mater, who t IABC’s 2013 world conference in New York—upon hearing the results of a Gallup study indicating the vast majority of employees are not engaged—suggested those employees “need to leave.”  (Gallup’s 2013 study found only 29 percent of U.S. employees are engaged, meaning Lazarus thinks 71 percent of employees should walk out the door.)

Engagement and passion do not come with a paycheck. Building passion for the the company, the brand and the product take work on leaders’  part, not threats. If employees are not engaged, if they are not eating their own dog food, that’s not employees’ fault. That’s a failure of leadership.

I don’t know much about PayPal’s internal communications processes. What I do know, I like. On the inaugural episode of TV@Work, podcast host Ron Shewchuk interviewed Mark Kraynak, PayPal’s Manager of Global Communications, about the brilliant video news roundup he created, PayPal in 90 Seconds.

But considerable research reinforces the idea that one-way, top-down leader communication is increasingly ineffective. Instead, leaders need to engage in more personal dialogue in order to build a sense of common purpose and shared values among employees. Research reported last year in the Harvard Business Review argues for direct, conversational involvement of senior leadership. Study authors Boris Groysberg and Michael Slind found that “Traditional corporate communication must give way to a process that is more dynamic and more sophisticated. Most important, that process must be conversational.”

An email directing non-engaged employees to find work elsewhere hardly qualifies.

The Marcus memo came up at the end of last night’s The Crisis Show, on which I was a panelist along host Rich Klein and crisis expert Greg Brooks. Greg aptly pointed out that no matter how the the brouhaha shakes out, prospective employees researching PayPal will find Marcus’s memo for years to come. Like Cerner, the company could lose out on some potentially stellar new hires who opt not to work in so autocratic a culture. (PayPal’s culture may well be brilliant, but reading the memo is likely to produce a different perception.)

Brooks also noted that investors may wonder just how bad things are if Marcus needs to drag employees, kicking and screaming, to use the PayPal app. Because PayPal is owned by eBay, it’s not possible to compare an impact on the share price to Cerner’s experience, but no leader ever wants to create doubt in the minds of investors.

Mostly, though, I wonder what happened to the morale of those employees at whom the memo was aimed. Did they feel more engaged? If so, that means they want even more to be part of PayPal’s journey. They are inspired to help the company succeed. They want to pull other employees along with them. They want to talk about their passion for the company and its products with family and friends. They feel more like the people they work with are an important community in their lives.

While many of those employees may well have downloaded the app or recovered their forgotten passwords, I suspect some are taking Marcus at his word and exploring alternative employment options. Most, though, are probably sticking around as their level of engagement tumbles.

On The Crisis Show, Rich asked if Marcus should apologize. Apologies are a dime a dozen these days. I suppose it wouldn’t hurt to apologize to employees if he really meant it. But an apology won’t go nearly as far as engaging in conversation with staff, applying each of the four elements of conversation defined in the HBR study:

• Intimacy—Personal and direct communication that involves at least as much listening as speaking
• Interactivity—Talking with, not to, employees
• Inclusion—Employees actively engaging in organizational messaging as leaders involve them in telling the company story
• Intentionality—“A clear agenda informs all communication”

As Keith Rabois, a Khosla Ventures investor, tweeted:

The problem is with your products and culture when employee refuse to use your app: http://t.co/lPVIqEIFCq.

— Keith Rabois (@rabois) February 12, 2014

Yup.