What About Employee Morale?

by TMT Editor

With purses tight, the quest to find ways to save money typically leads to the usual suspect, layoffs. But with this downturn, all sorts of options seem to be on the table. According to a new analysis by Hewitt Associates, for instance, most companies could save millions of dollars by suspending their 401(k) match for only one year.

Even though Hewitt recommends that employers take this step only as a last resort, the very mentioning of the possibility is worrisome. More than ever, employee morale is important. A precursor to retention is good employee morale. A company that spends good money to identify its best peformers and knowledge custodians in order to spare them from the cutting ax doesn't want the employees left behind to lose their will to produce and contribute.

"Employers should also consider their remaining employees, who will watch their friends and colleagues lose their jobs," says Michael J. Canavan, a labor and employment attorney in the law firm of Pepper Hamilton LLP. "It's critical to ensure that your remaining employees maintain their morale, and that they stay motivated under the pressure of trying to maintain operations with a decreased workforce. This is a critical, but often overlooked, aspect of any downsizing plan."

Canavan suggests employers consider the following points to get the most out of employees in difficult circumstances:

1.  Carry out downsizing respectfully. Nothing can poison employees' morale faster than watching their former colleagues be shown the door abruptly and disrespectfully.

2.  Clearly communicate what's expected of remaining employees. 
    
3.  Recognize that remaining employees may have ambivalent feelings; they might feel "survivor's guilt" in being spared while their colleagues were not as fortunate.

The point is that high performers are people, too, and the reasons for their productivity can be complicated. To assume that they will continue to contribute, no matter and at levels they always have, is a mistake. During a recession, a sense of togetherness and shared struggle between employer and employee is especially important .