Transparency Key to Sustain Employee Performance During Recession

by Kellye Whitney

In the midst of the current recession, prices for food, gas and most everything else are steadily rising. Employee performance, engagement and organizational loyalty, on the other hand, are likely to decrease.

Employers would do well to pay close attention to feelings of insecurity and the resulting performance disruptions that can occur during an economic slump, said Manny Avramidis, senior vice president global human resources at the American Management Association.

"Obviously it depends on the industry and the business that you're in, but usually during an economic downturn, most businesses aren't performing up to their potential," he said. "Employees are more concerned about their future employment and their personal well-being than they are about getting the job at hand done, which can often lead to quality and production issues."

To combat these workplace or work-quality issues, Avramidis said employers can be more proactive in creating a transparent work culture, one that promotes and maintains clear and consistent communication throughout the organization. Every employee should know exactly where they stand, as well as where the business stands, and what the organization's strategy will be to get through the economic downturn.

"Once the strategy is shared, you would hope that management and individual employees or contributors are able to engage and be part of the solution, whether it means creating new products or services or different products that perform better during an economic downturn, tightening belts, managing expenses a little more carefully - whatever it takes," Avramidis explained.

Taking the time to create clear, consistent communication that leads to organizational transparency will promote employee trust and loyalty during rough times and sustain these feelings once the economic situation improves.

"The organization has to be careful not to damage relationships with their employees, customers or shareholders, or whoever the interested party is in an economic downturn, because that's very hard to overcome afterwards," Avramidis said.

Once talent managers lay their business cards on the table, Avramidis said it's an ideal time to either retrain or show continued interest in employee development so, once through the economic downturn, the organization is positioned to come out stronger than ever on the other end.

"Even though unemployment is up and the economy is struggling, unemployment is at about 5, 5.1 percent, which is still extremely low," he said. "When it comes to unemployment of qualified talent, it's a lot lower. We can't ignore that, and we certainly don't to come out of this economic down turn in a situation where all of our strong talent is looking to leave because they didn't like the way we treated them during the downtime."

In an effort to facilitate transparency, some organizations even publicize worse-case scenarios, which Avramidis said can help alleviate some of employees' insecurities. These might include worse-case scenarios for the business, as well as potential employee separation - what they would be entitled to from a severance, outplacement and training standpoint.

"Good talent is still very hard to come by," he said. "Baby boomers are still going to be retiring in larger numbers than what they're doing today and the very near future. We'll still have the same talent shortage during this economic downturn as we will after it."

[About the Author: Kellye Whitney is managing editor for Talent Management magazine.]