It seems that everyone is nervous about losing their job these days. Given the amount of layoffs reported daily in the news, it is hard for existing employees to feel safe, even if they do not have any evidence to the contrary.

Employees do not function well in a fear-based environment; both productivity and creativity are diminished. In speaking with several companies, both large and small, I was able to identify some of the ways economic concerns are undermining employee productivity.

1.      Decisions are not being made and time is lost because no one wants to take the risk of being wrong. In the meantime the company lacks direction and scarce resources are being wasted.

2.      Employees are rigidly following their job description. They do not want to take on any additional projects for fear of sticking their neck out.

3.      People are jockeying for position, wanting to be aligned with the person or department that has the best chance of surviving a layoff. Therefore honest opinions and assessments are replaced with what the potential new boss wants to hear.

4.      Employees have difficulty focusing, feeling vulnerable they lack to ability to fully concentrate. This severely impacts creativity and innovation suffers, at a time when new ideas and products are most needed.

5.      Managers create change for the sake of change and not necessarily for strategic reasons. Decisions are emotionally based, favoring the lowest cost strategy instead of the right strategy

What your company can do to better manage emotions during these unsettling times:

1.      First, management needs to exhibit proper leadership behavior. Management should provide a clear message regarding the company direction.

2.      Provide forums where employees can ask questions. By promoting open discussions employees are able to voice concerns. This reduces wasted time spent speculating at the water cooler and eliminates false rumors.

3.      Be honest even if you don’t know the answers, communicate what you do know. These times are unprecedented and employees recognize the difficulty in predicting the future. Define what you know to be true today and what you believe will occur down the road.

4.      If you have information that you can not disseminate just yet, let employees know that a decision is being made. They don’t expect management to be able to predict the future as much as they want to make sure management has their finger on the pulse.

5.      Be sympathetic to their fears. It is sometimes beneficial for managers to show they are human as long as they do not express concerns to the point of creating fear. As the saying goes—a little sympathy goes a long way.

6.      Be open to one on one conversation with employees allowing them to speak privately about their concerns.

The corporate culture can become a competitive advantage or an economic disadvantage. Employees are a company’s greatest asset. In these hard economic times, an investment in employee moral can determine the future of the company.