Let me tell you what happened to me this week said a woman to her friends at the table next to us. My boss called me into his office and told me "You are just not getting it done for me this year." Her friends were stunned. She went on to say it was especially hard to take given she had a great year the previous year. I thought how many people are hearing similar words this year about their job performance. I also wondered whether this boss was being fair.
What was the boss trying to accomplish with his frank candor. Was he trying to motivate? If so, it did not work. The woman was clearly confused and demoralized. Was he trying to warn that if her job performance did not improve her job was in jeopardy? If so, that message was not clear. The woman was very concerned about the conversation but with the company not giving raises or bonuses, the consequences were uncertain.
A downturn in the economy has affected everyone as unemployment rises and major businesses and institutions are struggling to survive. This raises an important question. Do the circumstances created by a downturn in the economy contribute to employees being unable to meet their goals? If so, how should management react?
We know if you are going to win, you must retain your top talent. During a recession that is especially challenging as many of the "A players" are not achieving their goals. This has hurt their pride and their pocketbook. It has also caused them to become uncertain about their future.
When the economy is in recession, the normal retention tools are not available. Management has lost the compensation carrot. The stick is still there (you just are not getting it done) but without the carrot, the stick is ineffective. Even in the short term.
An economic downturn does not expose your already underperforming employees. You do not need a downturn for that. You should already know who they are and have addressed it. What an economic downturn does do is expose your good employees to feelings of uncertainty and insecurity.
How effective are your managers and supervisors addressing insecurity and uncertainty? If the above conversation is typical and I believe it is, they are not prepared. Perhaps not the exact words but regardless, when the economy gets better highly valued employees will be out of there, if not before, and management will not know what happened. The best retention tool during a non-recession or recession is employee goodwill. Unfortunately, for management, the FDIC does not insure goodwill, their leaders do.