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Sales down, so firms boost morale

Some managers come up with creative tactics to offset the effects of a sagging economy.

By Uri FriedmanContributor to The Christian Science Monitor / August 22, 2008

With real incomes declining, the US unemployment rate at a four-year high, and inflation running at its fastest clip in 17 years, managers across the country are running up against a pressing challenge – how to stoke workplace morale while addressing their organization's own economic needs.

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Many managers are shying away from the conundrum, research suggests, but some are tackling it head-on. And the methods vary as widely as the types of leaders and organizations that employ them.

Take Frank Jacobs, who purchased 700 "Positive Power" CDs last month from motivational speaker Ed Blunt. Mr. Jacobs, vice president at pharmaceutical company Novo Nordisk in New Jersey, thinks the $54 two-disc sets will act as a catalyst for employee productivity after he distributes them to his sales team in September.

"If you bring a speaker in, people hear the message once," he says. "But if you have CDs, people can hear it again and again."

When funding dried up for the nonprofit West End Community Center in Providence, R.I., the center's leaders called a staff meeting to announce a temporary freeze on pay raises. But they also challenged employees to cut back on operating costs without jeopardizing quality of care for the center's day-care and extracurricular youth programs. Soon enough, employees organized a weekly car wash and bake sale to fund a much-anticipated field trip to a water park, and West End's art director began shopping at a recycled art supplies store.

"People generally understood the situation, nobody quit, and we said we hoped in the future that [the situation] will change," says Joe Gabriel, West End's acting director.

One approach: ban gossip

Sam Chapman, CEO of Empower Public Relations in Chicago, took a more direct approach. Last year, he banned gossip in the office and fired three employees for violating the policy. At a time of economic distress, he says, the ban ensures that rumors about salaries or layoffs are dispelled face to face. He believes the agency's ability to avoid the negative energy from gossip has helped it grow from nine to 17 employees in a year.

Managers must strike a delicate balance during periods of downsizing, according to Chad Rosen of the Burnham Rosen Group, a Boston-based consultancy. "If you just focus on the doom and gloom, everybody gets depressed. If you focus on an inspiring message, everybody thinks you're a Pollyanna," he says. "You need to sympathize with the pain people are having yet demand high performance."

Sympathy may be in short supply, however. Recent surveys by the consulting firm Watson Wyatt Worldwide indicate that while nearly half of US employers believe stress from long working hours and demands to produce more with less is influencing business performance, only 5 percent say they've taken strong action to remedy the situation.

And even though most US workers continue to be optimistic about aspects of their jobs – the percentage of Americans concerned about getting laid off or having their wages reduced has remained relatively static over the past decade, according to a Gallup poll released Monday – there's also mounting evidence that many people's attitudes at the office are souring. For example: Over one-third of American workers feel pressure to stay with a bad boss because of the economic downturn, Lake Research Partners in Washington announced in July.