How can firms
motivate staff during
a recession
During a recession, firms look to cut costs in order to remain competitive and
ultimately stay in business. This can be achieved in a number of ways, including
switching suppliers, making the production process leaner and making workers
redundant. Whilst these options are being implemented, motivation of the remaining
workforce needs to be maintained in order to preserve productivity levels.
Motivation: The reason for engaging
in a particular behaviour
During a recession, employees may experience
a pay freeze or pay cut. According to Frederick
Herzberg, money is not a motivator; however it
does have the potential to “dissatisfy”, therefore
a negative effect on wages will probably have an
adverse effect on workers attitudes towards their
work. It is also quite probable that motivational
tools that were used by the firm before the
recession which involved a monetary cost may
be withdrawn as part of a cost cutting exercise.
When David Cameron formed the coalition
government, he announced that ministers would
not be provided with a ministerial car and should
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use public transport instead. Axa have stopped
their free gym membership for employees and
they no longer offer ‘Free Fruit Fridays’ and
Sellafield Ltd, the energy provider, has announced
it is to stop offering subsidised bus travel to work
for its employees. Firms therefore require other
methods of motivating employees when cost is
an issue.
Fringe benefits: A method of rewarding
an employee in addition to paying
a wage or salary
A number of theorists, including Elton Mayo,
Frederick Herzberg and Abraham Maslow agree
that ‘recognition of effort’ motivates workers.
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How can firms
motivate staff during
a recession
continued
This can be achieved relatively cheaply by
presenting ‘Employee of the Month’ awards or
in the case of Starbucks ‘Partner of the Year’.
Accommodating employees’ needs is also
viewed as a motivating factor in the workplace.
Offering flexible working hours allows employees
to take control over their work/life balance.
Many companies, including BA, Lloyds TSB and
T Mobile, have adopted ‘flexi-time’ contracts for
their workers to boost their motivation levels.
Google allow their software engineers to take
one day a week to work on a project of their
choice to cater for their personal creative need.
We have regular meetings and I just wouldn't
expect somebody to do something that I wouldn't
do myself."
‘Dress Down Fridays’ have also been adopted
by many firms. This allows employees to dress in
casual clothing on a Friday. SCA Hygiene made
the concept the focus of their advertising
campaign for Triple Velvet toilet tissue in late
2006. The origin of dress down Fridays is
thought to have come from Hawaii where Aloha
Fridays were introduced in 1966, allowing
employees to wear Hawaiian shirts to work.
This practise then extended to California where
employees embraced ‘Casual Fridays’, then
spread globally.
During a recession, workers may expect fringe
benefits to be reduced or cut. However, as
illustrated above, there are low cost options
available that can be used to maintain the
motivation of staff.
If employees feel that they are valued by their
employer, motivation levels often increase.
Harrods have recently announced that they are
going to offer their employees the option of
studying for a BA Honours degree in Sales,
which will enable their employees to enhance
their career prospects whilst making sourcing
of qualified employees for managerial roles
easier for the business and more cost effective.
Effective communication with staff was proven
by Elton Mayo to increase productivity. Workers
are likely to increase their effort if they are kept
informed about the reasoning behind decisions
made by senior managers. Regular team meetings
often take place within firms to ensure that
workers feel involved in the everyday running of
the business. According to Shaf Rasul, a dragon
on the BBC’s Dragon’s Den online, leading by
example “Can boost motivation.” He added:
"I take on board what all my staff are saying.
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