Keeping up in a down economy

Oct 16 2009 by Bob Nelson Print This Article

Recessionary time can be very scary. Stories of economic woes fill the headlines, but the real toll of the recession is its impact on everyday people: those that have lost their jobs, benefits or wages - and those who are concerned about losing these things, which includes most everybody else.

Tight economic times bring more stress, anxiety and fear to all employees, which, if left unchecked, create a negative work environment that leads to declining morale, eroding trust and loss of productivity for the company.

A recent survey by Quantum Workplace, a company that tracks employee engagement scores of over 1.5 million employees within 5,000 companies nationwide, found that 66 percent of the firms reporter a decrease in employee engagement that appears to be in direct response to the negative circumstances of the recent recession.

According to Peter Capelli, a professor of management at Wharton, "Workers in a downturn can get so nervous that they just freeze up and aren't able to do good work, especially if they're afraid of being laid off and it's not clear what the standards are."

The key, then, is to focus on the right things that help to motivate your workers to improved performance, and overcome their inherent fears.

Just what are these "right" things? To answer this question, I examined employee motivation research I have conducted with variances in management practices of those companies whose employee engagement scores have increased during the current recession, compared with organizations whose scores nosedived over a comparable period.

Based on this research, I identified six clear dimensions that any manager or organization can implement to create a more motivating work environment for their employees today:

  • Create a Clear and Compelling Direction
  • Direct, Open and Honest Communication
  • Involve Employees and Encourage Initiative
  • Increase Employee Autonomy, Flexibility and Support
  • Continued Focus on Career Growth and Development
  • Recognize and Reward High Performance

Create a Clear and Compelling Direction

The starting point of any organizational change is setting a clear and compelling vision for the organization. If employees are not inspired by what the organization is trying to do, it will be more difficult for them to have the motivation and direction to succeed, especially in tough times.

Frances Hesselbein, President of Leader-to-Leader Foundation, once put it this way, "No matter what business you're in, everyone in the organization needs to know why." Do a reality check and ask employees what the mission and purpose of the organization is. If you get a different answer from each person you ask, it's a good indication that things have drifted or perhaps have not been clear for some time.

Direct Open and Honest Communication

My research found that communicating opening and honestly was the top-reported employee motivator, cited by 95 percent of employees as the variable they most wanted - and needed - at work to do a good job.

Everyone needs to have answers to their questions and adequate information about their jobs as well as information about what's going on in other parts of the organization, new products and services, and the organization's strategies for success.

Even when the firm is struggling, it's critical to be honest with employees. Doing so will almost always lead to an increase in teamwork, respect and dedication, especially if delivery the of the bad news is also used as an opportunity to brainstorm and communicate with employees about ideas and plans for turning things around.

Involve Employees and Encourage Initiative

Giving employees explicit permission to act in the organization's behalf whether that is through idea suggestions, problem solving, exceptional customer service, or a host of other possibilities is also very motivating.

My research found that 92 percent of employees feel it is important for managers to ask for their opinions and ideas at work, and 89 percent feel it is important for their managers to involve them when making decisions at work.

As Martin Edelston, chairman and CEO of Boardroom, says, "Sometimes the best idea can come from the newest, least experienced person on your staff." Like the hourly paid shipping clerk who suggested that the company trim the paper size of one of its books in order to get under the 4-pound rate and save some postage.

Boardroom made the change and did indeed save some postage: $500 million the first year and several years since. Explains Edelston, "I had been working in mail-order for over 20 years and never realized there was a 4-pound shipping rate. But the person who was doing the job knew it, as do most employees know how their jobs can be improved."

Increase Employee Autonomy, Flexibility and Support

Once employees have been enlisted to get involved and make suggestions and improvements, they need to be encouraged to run with their ideas, take responsibility, and champion those ideas through to closure and completion.

My research revealed that "autonomy and authority" and "flexibility of working hours" were marked as being important by 89 percent and 85 percent of employees, respectively. To the extent that managers and the organization are able to provide these motivators for employees, it can greatly impact their morale and performance in having them do their best work possible.

No one likes to be micromanaged. Employees prefer to be assigned a task and allowed the freedom to develop a work plan that suits them. Roles and responsibilities may be previously defined, but a job varies with the individual who occupies the position.

Here is where truly knowing your employees becomes important: understanding their strengths and weaknesses allows a manager to best assign projects and tasks in a more meaningful way. Take it a step further by allowing employees to pick and choose the projects and responsibilities on which they would like to work.

Continued Focus on Career Growth and Development

On first glance, it may not seem like employee learning and development should be a priority during tough times. After all, if things are tight, does the organization really have the money, resources and time to spend on helping employees learn and grow? Shouldn't employees instead be focused just on keeping their jobs instead of developing new skills?

But there is no better time than a downturn to help employees learn new skills and new ways to contribute to the organization's success. Taking an action-oriented approach in helping top performers further develop their skills and strengths can help in bad times as well as good.

In my research with employees, management support of employees who want to learn new skills was one of the top motivators - reported by 90 percent of employees as being important to them. Since all development is essentially self development, providing opportunities for employees to learn and grow benefits both them and the organization.

Recognize and Reward High Performance


  • Include employees in the decision making process, especially as it relates to their roles and responsibilities
  • Encourage employees to develop existing skills and provide ample opportunities for career development
  • Identify employees who show the most promise as leaders and offer them the chance to participate in leadership training and development
  • Establish policies that allow employees flexibility in their schedules, and let them work directly with their managers to develop a plan that benefits them as well as the company
  • Develop company-wide healthy living programs that promote a healthy lifestyle such as fitness, nutrition, and mental well-being

The most significant driver of desired behavior and performance known to mankind is the notion that "you get what you reward." As a manager in any organization you will get more of the desired behavior and performance you want from your employees by taking the time to notice, recognize and reward them when they excel in their work.

In my research I've found that it's almost universal that today's employees want and expect to be recognized when they do good work, although only 12 percent report that they are consistently recognized in ways that are important to them and 85 percent of employees say they feel over worked and under-appreciated where they work today.

What is the best way to motivate employees in tough times? Surveys, studies and discussions with employees from all industries have revealed a very simple formula for successfully rewarding employees: Treat your employees with respect, pay them fairly, and notice, recognize and reward them when they do a good job.

Sure, money is a motivator, but it is not the only motivator and it does have its limitations. Often, simple, creative, no-cost ways to show your appreciation in a timely way can have a larger impact on your employees in making them feel special and motivating them to rise to the occasion in difficult times.

There are many circumstances managers cannot control, but there are many more they can directly impact in positive ways. By focusing on those things that can be controlled, managers can help buffer employees from the negative impact of the economy and help them focus their energies to achieve better results.

While none of us can individually change economic conditions, all of us can decide how we react to poor economic times and focus our efforts in specific ways that can have a positive impact where we work. In so doing, we can create a more positive and productive work environment that will help your company thrive in challenging times.


About The Author

Bob Nelson
Bob Nelson

Bob Nelson is author of "Keeping Up in a Down Economy" and president of Nelson Motivation, Inc., a management training and consulting company that specializes in helping organizations improve their management practices, programs and systems.