A global pandemic, political unrest around the world, and massive climate changes have already left people physically and emotionally drained. To top it off, there’s now talk of an economic recession. Microsoft, Netflix, Shopify, Tesla, and other tech giants have laid off hundreds of employees to cope with the economic downturn (you can go to https://layoffs.fyi/ and actually monitor this in real time!).
But studies have shown that the impact of layoffs in almost every case has a “death spiral” effect. According to Wayne Casio’s research, over 3 million Americans lost their jobs in the 2008 recession. Fast forward to 2009: 81% of the top 100 companies in Fortune’s list of “Best Employers to Work For” had no layoffs that year.
Of course, it’s understandable that a company’s cash flow is its lifeblood and some level of downsizing might be required to preserve it. But it’s also important to consider both the long and short-term consequences of layoffs. Downsizing often brings with it a barrage of side effects such as ‘survivor syndrome,’ voluntary turnover, and drops in innovation and productivity.
The most successful organizations use layoffs as just one among many tools to improve their performance. It may seem counterintuitive, but organizations should consider this as an opportunity to strengthen the company’s medium and long-term agility through targeted coaching, change and career-management interventions.
In this blog, we’ll be taking a closer look at how performance management building blocks—including feedback, goal-setting, and career development—can help organizations emerge from the storm, stronger than ever.
1. Goal-setting drives focus and productivity
The pandemic introduced people to many different states of mind—languishing and doomscrolling being some of them—most of which loosely translate to this: a feeling of demotivation, and the inability to focus at work. According to Adam Grant, an organizational psychologist at Wharton, one way to escape this “blah” feeling is to set small goals that stretch your skills and heighten your resolve. After all, a small win can go a long way in helping you rediscover your energy and enthusiasm.
When it comes to work, this can be achieved by setting SMART goals that offer clarity on organizational priorities. This way, people remain on track and focused on results. And managers can create an environment of support and accountability for their teams.
2. Meaningful one-on-ones and check-ins create trust and alignment
If you’re a hybrid or fully remote company, you might have to be more intentional about checking in on progress, sharing ideas, and assigning tasks. The idea is to maintain a regular cadence of feedback, coaching, and goal-setting conversations to build trust and alignment. Doing so frequently can help you realize which individuals can help you power through crises and set your company up for success in the future. Investing in these employees via continuous feedback and upskilling programs is a great way of staying future-ready.
If there’s anything we’ve learned from the Great Resignation, it’s that losing high-performers always hurts. And that it helps to have in-house talent rise up whenever there’s a voluntary turnover wave.
3. Recognition is important, even during an economic recession
Studies show that workplace recognition factors in one of the top reasons for an employee to stay in or leave an organization. One might assume that employees are less likely to quit in the middle of an economic downturn. And therefore, it is okay to deprioritize retention. However, retention can help in both the short and long run. In the short term, recognizing your people’s efforts will encourage them to innovate and help achieve the company’s goals. When it comes to long-term strategy, recognition helps build loyalty and a great employer value proposition.
4. Setting clear expectations and having continuous feedback conversations are key
Sudden layoffs can be emotionally deflating for employees. The uncertainty of whether their job will be impacted affects both company culture as well as engagement. What can help in these difficult times is focusing on performance, setting clear expectations, and communicating feedback regularly. Help your teams stay on track with their goals. Recognize their performance, and show that you’re committed to investing in their growth.
When giving feedback to your direct reports, remain forward-focused. Address key strengths, skills, and career interests, and how you can support their continued growth.
5. Transparency and open communication go a long way during performance reviews
For companies struggling to survive this economic downturn, promotions and raises might be off the table. In that case, it’s important to be as transparent as you can be with your direct reports. No one likes to hear that there is no money for hikes or promotions. But people can understand and accept business conditions, especially when the alternative might be a layoff.
Also, consider creative ways to invest in your people’s professional growth. This could be encouraging them to take an online class, assigning them to projects with high visibility, or finding them a mentor. Use performance reviews to affirm someone’s strengths and spend time co-creating a clear, compelling path of growth.
Performance management is essential for business success
Managing individual performance, team alignment, and morale is vital - especially in times of crisis. Using Mesh’s powerful performance management tool enables you to do all this and more at ease. Book a free demo with us to learn how you can set and track goals, share advice and praise, and manage performance reviews, all in the flow of work.
Here’s to better aligned, more engaged, and happier teams—no matter what kind of crisis comes our way!