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December 15, 2008
Boosting Employee Morale in a Down Economy
by Robert H. McKown
How do you keep employees engaged during an economic downturn and layoffs? This can be a challenging time, especially during uncertainty. Employee morale and focus can wane. Challenging times require different behaviors. As a human resources consultant and entrepreneur, I am offering a few pointers in what tactics and cost conscious actions employers can take.
Increase Employee Communication
During these uncertain times, there is a tendency for businesses to reduce communications, to shield their people from potentially bad news and to appear calm. However, being straight forward and visible with employees is much more important now than it ever has been. While this crisis has seemed to appear quickly, some organizations have experienced the downturn several years ago like one of our manufacturing clients that saw the first sign of a business weakening and price pressures in their industry, so began a communications campaign then. They developed a communications plan to emphasize the company culture and strong work ethics that had made their company successful; their first-line supervisors began meeting twice a month with employees. When employees understand what the business situation is, they can help. But, when they are kept in the dark, employees will make something up and that will probably require damage control while you address and dispel the rumors.
With employees being the first line of contact with customers and vendors, it is essential that management address the issues head on with employees. Keep the lines of communication open - tell the truth to employees. Making sure they understand the organization’s current challenges, future plans and why decisions are being made will have a direct impact on the business’s performance.
Another tactic for a business owner and leader to do is to hold regular “town hall” style meetings where anyone can ask questions of senior level executives. Communicating face-to-face is most important and more personal than distributing cold memos.
Keep Employees Involved
People are craving leadership! They want to follow someone who engenders enthusiasm and passion. People don’t want to be managed – they want to be led. Especially when times seem uncertain, it is essential that your people have as clear a vision as possible of what you – the business owner or leader – have for your organization. Once they understand your vision and mission and perceive what you are thinking, then they can engage going forward. You don’t have to be some super charismatic leader to do this, but you have to be believable. Leaders come in all shapes, styles and types. No matter where you fit in your leadership style, you can be successful by “casting your vision” for people to follow.
Get employees’ input, give them opportunities to contribute or projects to lead. Encourage people to express opinions and exchange ideas. Establish processes in which you can turn their ideas into action or better yet, encourage the employee with the idea to implement it. I have seen organizations save thousands of dollars with some very simple changes in methods and procedures that were prompted by their first-line employees, not managers. Keep everyone informed about the ideas and improvements that have been implemented and give credit to the people that made the suggestions. You will find that as employees become more involved, they will remain motivated because they now have a stake in the solution.
Give Recognition, Appreciation and Praise
As more companies are tightening their belts, it is important to remember that it is not just money that is the motivating factor for employees. More than three-quarters of employees (76 percent) who responded to the 2008 World of Work study published by Randstand, an Atlanta-based employment services firm, said feeling valued was the most important factor for happiness at work, out of several options. Nothing motivates or inspires employees more than to be treated as valued, contributing members of the team. Let employees know how the company is relying on their talents, perseverance and spirit to carry the business through in these down times. It is their opportunity to shine and help the organization at the same time.
In reviewing the best performing companies, one would note that they all have one thing in common: they have loyal, motivated employees. Their employees feel they have an employer who appreciates the work they do; hence, they are more likely to sacrifice additional compensation or bonuses and to work diligently when they receive recognition and praise from their boss. Their secret: these companies recognize rituals, traditions and a work culture that cultivates high levels of employee participation which improves morale.
Praise and recognition are powerful tools that cost your company little or no money. Some organizations have established recognition programs that focus on character qualities rather than the typical “service awards”. A human resources training tool like Character First! ® instills important character qualities, such as diligence, dependability, initiative, and thoroughness, to name a few of the 49 available through a human resources firm. You can even develop your own qualities from the values statement of your organization, but these are tools your organization can use. By using fundamental qualities to recognize people rather than just “years of service” emphasizes the values and corporate culture that you are trying to integrate. These recognition awards can be done annually rather than the usual five-year increments, and when they are done in public, group meetings are powerful motivators.
Lastly, praise much more frequently than you criticize. Encourage praise and recognition from employee to employee as well as from the supervisor. The book, “The One Minute Manager” by Kenneth Blanchard, taught that it is important to find people doing things right and acknowledge them as they happen. No matter how challenging the economy or your business conditions, you can identify and acknowledge people as they do good things each day at work. People love to be recognized for doing something good. This is easy and simple to do, as long as you look for the best in people rather than the worst.
Know Your Employees
What do they need and want from work? Different generations have different expectations of what you “should do” for them. Take time to learn the differences between generations and people in your organization. Realize that they think differently and expect different rewards.
Boomers are a generation that will do whatever it takes, they are very results oriented, and are often workaholics. We have seen that the Generations X & Y also get the job done, though differently. They are tech savvy, like collaboration, often digitally, and may stay up all night getting the work done, but then want the next day off. It is essential that you understand who the people are that work for you. Every employee is an individual. Take time to get to know what makes them tick.
Enhance Work/Life Balance
Don’t have a knee jerk reaction by cutting your companies “soft” employee benefits in an economic downturn because these work/life benefits are one of the best ways to boost morale during difficult times. As employees are asked to do more with less, employers have used these programs to help their employees cope with and balance all of the demands of their time between work and family life.
Now that the U.S. Government has confirmed all along our suspicion that we have been in a recession for the past 2008 year, we ought to look at the history books of how companies reacted to corporate work/life benefits in the recession of 2001-02. A survey of 945 major U.S. employers by Hewitt Associates, a global outsourcing and consulting firm, found that nearly all forms of work/life programs enjoyed modest growth during that period. “The fact that these programs have [had] continued to grow through a period of deep budget cuts and belt tightening suggests [suggested] that employers recognized their impact on the bottom line,” said Hewitt work/life consultant Carol Sladek in a May 15, 2002 interview.
Increased numbers of U.S. businesses are offering their workers access to counseling services through employee-assisted programs, commonly known as EAPs. The programs offered by EAPs can take many forms and address a wide range of family and workplace issues that cause stress and affect employees. Many businesses outsource the services to independent counseling agencies, or EAPs are available through an employer’s group health insurance provider as part of their comprehensive employee-benefits package.
Other work/life benefit programs to consider implementing in your company during a recession could include: Child care assistance; dependent care spending accounts; elder care assistance; resource/referral programs; long-term care insurance, a benefit some companies are providing employees; flexible work options - like flextime, part-time, work at home, job sharing, compressed workweeks and summer hours; adoption benefits; education reimbursement programs; career counseling and support groups; financial security programs like financial planning, scholarship programs and financial education workshops; onsite conveniences like ATMs, banking services, credit union, dry cleaners, and travel services; and group discount programs like group auto insurance, group homeowners insurance, long-term care insurance and group legal services.
Cultivate Trust
Leaders are the keepers of trust in their organizations. The trust or lack thereof within your organization can significantly affect the ability of your employees to cooperate and collaborate to achieve the goals that will drive the vision. If people don’t have confidence in you as the business owner or leader, you will have difficulty getting collaboration and cooperation. For you to cultivate trust, your people must know…
- You are not out for yourself.
- You do what you say.
- You don't expect more from them than you expect of yourself.
- You want them to succeed.
- You are consistent.
- You will recognize their accomplishments.
- You will hold them accountable, but you won't blame them.
- You will turn mistakes into a learning experience, not an inquisition.
It also helps if you have an “inner circle” of key team members, peers and colleagues who you can count on when needing to face challenges. These individuals should be people that can always tell you the truth, not what you want to hear. Often times, it is hearing the right mix of second and third opinions that not only enables your best thinking but over time could be the difference between executing solid results and avoiding disaster. To cultivate your inner circle, map whom you turn to for which issues – what is their expertise, what informs their perspective, and where are they on the trust scale. Make a list of the best “outside thinkers” that you as the business leader and the company, as a whole, could use to supplement the critical inner circle – and seek to find these employees and interest them in becoming your “thinking partners”.
Develop People
Development and training are often one of the first areas that organizations cut during challenging times. You must be wise, don’t spend on unnecessary things, but be willing to keep investing in people. It may not even mean spending money on education because this is a time where you can do internal cross-training to give people challenges that they desire. Notice I said “desire”. We know that we are going to be asking people to do more, with less; so take advantage of the opportunities you have and see what other functions people want to learn. Giving them some options makes them feel valued and in control. When you are moving employees around and requiring them to do other duties, then they must be told what is being done and why it is being done. It is amazing how some employees don’t understand how important the survival of the business is to them personally. You must TELL, SELL & SHOW them the opportunities that lie before them even during a downturn.
Also, to avoid layoffs, you might want to consider the use of sabbaticals as one cost-cutting strategy that could benefit everyone. For the employer, it is an effective means of temporary staff reduction and could mean fewer layoffs. Sabbaticals can also serve as learning opportunities for employees; they can use the time to further their education and return refreshed, with new focus and new ideas.
Examples on how to structure sabbaticals include continuing to provide benefits for employees as well as partial pay by making the pay schedule 50 percent pay for a three-month leave, 40 percent pay for a six-month leave, 30 percent pay for a nine-month leave.
Communication is critical when implementing sabbaticals. Human resource departments need to clearly communicate the underlying purpose of the plan, plainly stating that the company is trying to avoid layoffs by implementing intensified cost-reduction methods. This communication will ensure employee buy-in and loyalty.
To make the sabbatical process successful, follow a few tips:
- Recognize employees who take on extra work – Consider a monetary or time-off reward to employees who cover for the co-workers who are on sabbatical.
- Don’t call sabbaticals a ‘benefit’, call them a ‘program‘ – Calling it a benefit will trigger employees to put a cash value on the leave time. Also, calling it a benefit, in the event of a lay-off or a shutdown, may become a point of contention.
- Don’t use sabbaticals as early retirements or phase outs because that defeats their whole purpose.
Robert H. McKown is president of XMi Human Resource Solutions and corporate vice president of human resources for XMi, both in Nashville, TN. XMi Human Resource Solutions is a full service human resources firm that consults with businesses and organizations in human resources, leadership development, change management and strategic human resources nationwide. XMi HR Solutions also provides payroll administration, health insurance, benefits administration and HR consulting to area businesses in Middle Tennessee. He may be reached at bmckown@xmihr.com, or 615/522-5256.