September 3, 2021 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

Enable Social Recognition for Innovators 

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 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 actually help.

Need for Employee Recognition during a Recession

Best Practices of Employee Rewards and Recognition

Organizations need to understand that 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.

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

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, lets take a look at their impact:

Motivating through Employee Recognition during Economic Recession

1. Offers Inexpensive Solution 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 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 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

Top Management Role in Employee Rewards and Recognition

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 involve the management, they help in establishing a channel of communication between the two.

The management share their thoughts about economic scenario, its impact and the organization’s response with employees during such reward events. The employees can get to how they can play a role in helping the organization during this economically challenging phase.

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.

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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.