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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 drastically reduce the motivation levels of employees making the situation even worse. This article explores the impact and the business case for employee recognition during an economic recession.

Significance of Corporate Culture

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.

They believe that employee recognition is critical for keeping the workforce motivated, especially when organizations need 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 help.

What is the need for Employee Recognition during a Recession?

Build Culture of Openness and Transparency through Employee Recognition

Organizations need to understand that the commitment of their employees can be vital to help them survive through the economic downturn.

Moreover, employees also understand that their employers are under great pressure due to the drop in demand, sales, and profitability.

Factory Worker

Hence any cuts in bonuses or expected pay raises are generally acceptable to employees during an economic slowdown.

However, a reduction in employee recognition is likely to affect the workforce morale and diminish their commitment and loyalty.

What is toxic workplace culture and the best ways to avoid it

However, the continuance of the program can inspire employees to support their organization through this difficult phase by giving their 100%.

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.

What are the Benefits of Employee Recognition during a Recession?

Given the importance of employee rewards and recognition programs during a recession, let’s take a look at their impact:

Motivating through Employee Recognition during Economic Recession

1. Offers Inexpensive Solutions for Employee Engagement

Use Technology to Improve Employee Engagement

It is the thought behind the recognition that holds significance for employees, rather than just the financial value of rewards.

During a recession, when employees might be deprived of the usual financial benefits, they feel valued by the appreciation 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 the Retention of Top Talent

Why switch from In-house Employee Recognition Platforms?

The lack of additional financial benefits and perks during a downturn often makes the high-performing employees feel dejected and disappointed,

However, the employee recognition program can make them feel that the organization is still valuing them for their contribution.

Even if the recognition is provided only through 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 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 The Impact of Employee Rewards and Recognition on Retention

3. Strengthens Emotional Bond between Employees and Management

Top Management Role in Employee Rewards and Recognition

Employee reward and recognition programs often require the active participation of employees. This helps in improving their overall engagement with the organization.

Moreover, since these programs often involve the management, they help in establishing a channel of communication between the two.

The management shares their thoughts about the economic scenario, its impact, and the organization’s response to employees during such reward events.

This helps in strengthening the bond between the employees and the management during these difficult times.


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.

Sagar Chaudhuri

Lead author: Sagar Chaudhuri, the Co-Founder and CEO of HiFives. He is an HR Tech Evangelist with over 25 years of experience in the corporate world and entrepreneurship. In the past, Sagar has worked with companies such as Genpact, Infosys, and ICICI Bank, in leadership roles. He has an engineering degree from IIT Kharagpur and an MBA from IIM Lucknow. Connect on LinkedIn

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HiFives is a global employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. It is used by 100+ large enterprises, small businesses and startups in manufacturing, retail, technology, financial services and media, across 25+ countries.