Motivating through Employee Recognition during Economic Recession

With the threat of an economic recession looming large, organizations resort to recruitment freezes, layoffs, and pay cuts. Such measures often 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 of employee recognition during an economic recession.

Employee Recognition during an economic recession

As mentioned before, the primary objective of business organizations during economically tough times is to cut down their operational costs. For this most companies 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 maintaining their optimal performance and efficiency, especially during a time when the companies need 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

The most important thing that business organizations need to understand is that their employees can prove to be vital to help them survive through the economic downturn. Moreover, the employees also understand the need for their employers to reduce operational costs to overcome the shortage of funds caused due to a reduction in sales and profitability.

Hence any cuts in bonuses or expected pay raises are in general acceptable to the employees during the economic slowdown. However, if their employers choose to cut back on employee recognition, it is likely to affect the morale of the workforce and might even make them question their commitment and loyalty towards the organization.

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

What is the benefit 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 an 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.

The thought behind the reward is what holds significance for the employees, rather than 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 employee rewards and recognition program.

2. It paves the way for retention of talent

The lack of additional financial benefits and perks often makes the most talented employees feel dejected and disappointed with their employing organization.

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

Even if the recognition is provided only in the forms 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 the company 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.

3. Strengthens the bond between the employees and the management

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

The management can use the recognition platforms to share their and concerns resulting from the bad economic scenario with the employees.

The employees on their part can gain a better understanding of their expected role in helping the company emerge successfully 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 coordinated manner.


When it comes to keeping the members of the workforce motivated during the 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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