September 3, 2019 0 Comment

Motivating through Employee Recognition during Economic Recession

Whenever there is a threat of economic recession, organizations often resort to recruitment freezes, layoffs, and pay cuts. Such measures often drastically reduce the motivation levels of employees and make these difficult times even more challenging for organizations. This article explores the impact and the business case for employee recognition during an economic recession.

Employee Recognition during an Economic Recession

The primary focus of organizations during economically tough times is to cut down on their operational costs. For this, most organizations choose to discontinue any employee reward, recognition and other welfare programs that they might be running.

However, according to most HR experts, this might be counterproductive while trying to fight the recession. In fact, they are of the opinion that employee recognition can play an important role in keeping the members of the workforce motivated and keep their performance and productivity high, especially during a time when the organization needs it the most.

And all at a much lower cost compared to double-digit salary increments. At the very least, just a pat on the back or a ‘Thank You’ might actually help.

Need for Employee Recognition during a Recession

Organizations need to understand that the commitment of their employees can prove to be vital to help them survive through the economic downturn. Moreover, the employees also understand that their employers are under great pressure to reduce operational costs to compensate for the drop in demand, sales and profitability.

Hence any cuts in bonuses or expected pay raises are generally acceptable to employees during a economic slowdown. However, a cut back in employee recognition is likely to affect the morale of the workforce and diminish their commitment and loyalty towards the organization.

On the other hand, the continuance of such programs can inspire the employees to stand by their organization through this difficult phase and give their 100% to ensure sustenance of the business.

What are the benefits of Employee Recognition during a Recession?

Given the importance of employee rewards and recognition programs for the organization during the recession, it is time to take a look at the impact of these programs:

1. Offers Inexpensive Solution for Employee Engagement

Contrary to the popular belief, employee rewards and recognition programs can be run even with a minimal budget. The primary aim of these programs is to assure the employees that their hard work and efforts are well-acknowledged and appreciated by the organization.

It is the thought behind the recognition is what holds significance for the employees, rather than just the financial value of the reward itself. This is especially true during a period of economic recession, when the employees despite being deprived of the usual financial benefits, may still feel valued by the appreciation received through the employee rewards and recognition program.

Read about 5 Low Budget Ideas for Employee Rewards and Recognition and 10 Best Non-Monetary Awards for Employee Recognition

2. Helps in Retention of Top Talent

The lack of additional financial benefits and perks during an economic downturn often makes the most high-performing and talented employees feel dejected and disappointed with their current organization.

However, having an employee recognition program gives employees especially the top talent that the organization is still valuing them and appreciating them for their contribution to help the business stay operational, despite the economic challenges.

Even if the recognition is provided only in the form of a few words of praise or a certificate of appreciation, it can go a long way in making these top talented employees stay with the organization during the tough times.

These employees tend to develop a deep sense of belonging towards the organization, especially when it continues to appreciate and reward their efforts in some way or the other, no matter how small the reward or recognition may seem to be.

Read about Impact of Employee Rewards and Recognition on Retention

3. Strengthens Emotional Bond between Employees and Management

Employee reward and recognition programs often require active participation of employees. This helps in improving their overall engagement with the organization. Moreover, since these programs often also involve members of the management, they help in establishing a channel of communication between the two.

The management can use these reward and recognition events, offline or online to share their thoughts about economic scenario, the impact on the organization and the organization’s response with the employees. The employees can gain a better understanding of their expected roles in helping the organization successfully emerge from this economically challenging phase.

This enhanced employee engagement helps in strengthening the bond between the employees and the management and enables them to work in a more coordinated manner.


When it comes to keeping the members of the workforce motivated during an economic slowdown, employee recognition and rewards programs can prove to be one of the most cost-effective solutions for every organization.

James K. Harter, the chief scientist of workplace management and well-being at Gallup, says that in good times employee engagement is the difference between being good and being great, and in bad times it is the difference between surviving and not, which perfectly sums it up.

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HiFives ( is an employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. The platform enables supervisors and co-workers to nominate, recognize and reward employees using a points-based system. Budget management, jury-based evaluation and multi-level approval workflows are built into the platform. HiFives has social features such as a wall of fame and gamification features such as leaderboards, e-certificates and digital badges. It also has a global redemption system with country-specific e-gift card options. HiFives integrates with all leading HRMS systems, Office 365, Google Workspace, MS Teams, Slack and other popular tools used at the workplace. HiFives is used by many large enterprises, small businesses and startups across 25+ countries in the world, in many industries including manufacturing, retail, technology, financial services and media.