Article: How do companies deal with psychological recession?

Performance Management

How do companies deal with psychological recession?

Back to basics: Communication and transparency, the keys to maintaining morale and employee engagement during restructuring

In these times, maintaining productivity and employee morale to the optimal levels is key


Let the “data” for your people come from you and not from the outside. Let their interpretations be based on reality and not perception


Back to Basics: Communication and Transparency, the Keys to maintaining morale and employee engagement during restructuring.

Employee morale is a complex subject. The dimensions of employee morale encompass diverse angles and have many factors affecting it. Morale gets associated with pretty much anything and everything ranging from the all encompassing job satisfaction, the ever so not satiable compensation and benefits, the much desired hygiene factors to all other factors that influence an employee’s emotional well being in an organization. It’s the ‘so intangible’ emotional aspect of a job and dealing with emotional aspects is always a tough one, primarily since it involves looking into the behavioral aspects and the associated challenges and implications in the short and long term. People are an organization’s greatest asset and the behavioral aspects therefore assume a much larger impact value.

The current economic scenario is making behavioral aspects even more profound and impactful. Facing challenges that exist like the one we are experiencing today which is full of uncertainty which makes life stressful. Today’s situation is all about change – whether it’s changing mind sets that have developed when the economy was thriving or about the change in how we were functioning previously. And change is tough and preparing for a tough change is even tougher!

Change and Change Management

Today organizations are focused on change that people find most difficult to embrace. The preparation for 2009 has differing priorities that are more budget and headcount focused. This indicates that there is clearly a shift from future development orientation to equipping people with skills for constructively responding and dealing with the immediate environment.

The 2009 study by Hewitt and Associates covering 53 organizations, employing a total of 3.5 million people reveals some interesting facts. It states that nearly 70% of the organizations are trying to “find” productivity gains and closing interim work wherever the need may be.

The reality of the present times is about dealing with psychological recession. In these times, maintaining productivity and employee morale to the optimal levels is key. However, the experience is like dealing with all the soft variables with hard financial outcomes!

Most HR professionals in, these times of turbulence are supporting the business by going back to the basics. Most of the work schedule would encompass activities like:

  • Identifying and mobilizing critical know how and energy;
  • Making sure that key talent are in key jobs;
  • Ensuring optimum people to jobs deployment;
  • Identifying talent pipeline;
  • Initiating talent reviews and Redeployment Resourcing.

The need of the hour is being “IN TUNE” with employee thoughts. This is perhaps the most glaring truth that most professionals ought to be engaged in. Though this is perhaps, the most obvious and written about, yet it is the most understated. If implemented with little precision, this strategy can yield rich dividends. However there are no easy and simple solutions to how we can do this. I have always believed in speaking from the heart and being transparent with employees and that’s what I recommend. Yes, it sounds very simple but it isn’t that simple. Reality is tough and speaking the reality is tougher. That is why having honest conversations with employees is so tough! Providing the ‘right view’ on things isn’t therefore as easy task, but once it’s executed well, it makes employees believe in you and be with you forever!


It isn’t hard to believe that as per the report by Weber Shandwick in October 2008, 54% of employees say they have not heard from company leaders at all about the impact on their company. In fact 70% expect that the situation will have a negative impact on their company and 71% feel their leaders should be communicating more about current the economic problems.

In these times of crisis, communication is never enough. Indeed, what is required is more and more communication. All communication should cover some key messages and cannot be generic. It has to be replete with:

  1. Clear messages (e.g. “winning in tough times”) from the leadership. More sensitive re- messaging, alignment; “getting the right tone of voice”
  2. Getting out and hearing firsthand how people are feeling
  3. Ensure activities seen to be cost effective – These actually happen!
  4. More information about what is happening and why is it happening. INFORMATION IS NOT COMMUNICATION!Make an investment in talking & listening
  5. More emphasis on face to face and leadership visibility (e.g. CEO tour – acknowledge, plans for growth when turnaround)
  6. Morale boosting communication!

Open Door Policy

Providing easier and more access through open door policy to the senior management in these times really helps in building transparency and accessibility. Employees are different. Some employees find it fairly easy to ask tough uncomfortable questions in open forums. There are others who are more subdued and find it difficult to come forth and state their thoughts. So what does this translate to? It’s about doing more than what we regularly do:

  • More regular frequent opportunities for feedback: For example, quarterly employee meetings to inform employees about the company’s strategy and situation, line managers focusing on employee engagement activities, and HR teams building mechanism for bottom up feedback.
  • Monitoring impact of change programmes more proactively: For example, build change programs with milestones and evaluation loops, to ensure that the programme is working efficiently and has mechanism that raise the flag if they are not.
  • Leader led engagement programmes: For example, implement regular ‘CEO Speak’ sessions where employees can gain clarity on the future direction of the company.
  • And definitely....Enhancing the employee experience at key touch-points – recruitment, induction, transition and any other touch point the employee may have with HR.

There is nothing like getting support from employees through truthful and honest talk – it raises fewer hackles and does more to get that employee support and motivation that the employee is looking at. Crystal gazing of the future is tough and so is making commitments on what the future holds. The present is what we have and what can be made better. Employees are sensitive and understand every step an organization takes. They are also quick to interpret it in their own terms or from the “data” they receive from the overworked rumour mills and what the environment offers. Let this data come from you and not from outside and let their interpretations be the correct ones based on reality and not perception.

...Are we answering all these questions well for our employees?

If we are, we are bang on; if we are not, then we have to come up to it. That is the key to maintaining employee morale in these tough times – something which is a contrast to those high employee welfare budgets that we all had some time ago, this one is not about money but that personal touch that an employee needs today.

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Topics: Performance Management, Employee Engagement, Employee Relations, #ChangeManagement

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