Rules of Engagement

These days, to gain an increase in productivity and profitability, ? entrepreneurs must boost employee morale

During an economic downturn, employees often feel high levels of stress and powerlessness—a toxic combination. It’s up to you to remind them that you are all invested in the success or failure of the business together. Making the effort to invite each employee into the fold during formal and informal settings and giving them the opportunity to contribute to the continued success of the business in new ways can calm fears, create a sense of camaraderie, and enhance productivity.

Letting Go Gracefully

Cancryn says he didn’t want any of the employees he fired—mostly support staff he interacted with on a daily basis—to feel betrayed. So, before letting anyone go, the 49-year-old exec spoke to each of them individually so they would know their positions were in a vulnerable spot. “I told them where we were as a company, I shared my decision-making process about the layoffs, and I also gave them a chance to give me their feedback,” he recalls.

“They weren’t really surprised by the news because they already knew what was going on in the economy and they could see that the work just wasn’t there for them the way it had been in prior years. But, I think they appreciated the communication because they still came to work, they did a good job, and most weren’t speaking negatively about me or the company itself.”

Experts applaud Cancryn’s approach, noting that open communication with employees about pending layoffs is a key ingredient to keeping morale high. “If you know a lot of people are going to be laid off, it’s better for everyone to hear about it as much as possible beforehand,” says Russell Day. A failure to communicate openly and honestly with employees can be a recipe for disaster.

Layoffs may be necessary to help your company’s bottom line, but a poorly managed execution is a distraction that can burn bridges, destroy morale, and hinder productivity. If you must terminate an employee, do so with kindness, honesty, and respect—for the good of that individual, the morale of the co-workers they are leaving behind, and your company’s reputation. How you operate during these tough times will impact how well you move forward once they’re behind us.

This story originally appeared in the July 2009 issue of Black Enterprise magazine.

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