In today's rapidly changing economic climate, many employers are facing an acute dilemma – how do they make the necessary people changes to improve performance and profitability, whilst maintaining employee motivation and engagement? Ben Thornton has some answers.

There is a wealth of evidence linking business performance and employee behaviour. A recent study of corporate performance revealed that two thirds of business units scoring above the median on employee engagement also scored above the median on performance. Consider also that engaged employees work 57% harder and perform 20% better than those who are not, according to the Corporate Leadership Council.

In the current economic climate, organisations need to build flexibility and scalability into the workforce plan by re-skilling existing employees and implementing robust performance-management processes that enable business leaders to make accurate and informed decisions on both identifying key performers and releasing staff, should the need arise. However, companies need to avoid tactics such as carrying out a blanket percentage cut across the organisation that could potentially jeopardise levels of employee engagement.

Depending upon whom you speak to the economy is either entering or already in recession. Comparisons are made with the early 1990s or even the 1930s. However, whilst both those periods were difficult economic times, an upturn does ultimately come. Equally today, organisations should not just prepare to manage through the recession, but also be ready for future improving conditions. This means that organisations need to balance difficult messages with giving the impression of light at the end of the tunnel.

Maintaining levels of employee engagement is of paramount importance to organisations wanting not just to survive but to emerge stronger, more resilient and therefore ready for the upturn. Fully engaged employees will help organisations to deliver enhanced performance in the short term which will help to secure their own and the organisation's future.

By articulating what their vision for the future is, executives can give positive messages about the future balanced by the difficult challenges that have to be faced and overcome in the short term. Not only can this appear realistic to employees, who after all are as aware of economic conditions as anyone else, but it can give the sense of there being something to strive for in the future.

As executives start to plan, or launch, change programmes in response to the economic slowdown, it is recommended that they consider the following points in order to avoid destroying employees' willingness to give discretionary effort and personal commitment:

Communications

• Recognise employees as key stakeholders to the business and as individuals who have made their own personal investment in its success
• Clearly communicate the plans for the business
• Be open and honest about the internal and external realities of the situation; no platitudes
• Stress the causes that necessitate any change programmes, but also the benefits, which will arise from them
• Engender a spirit of mutual support and sense of purpose by focusing on the actions being taken
• Lead, rather than follow, the rumour mill
• Remind people of the successes the organisation is also having
• Remember, there is no substitute for person to person dialogue so messages should be delivered as far as possible in person.

Organisational change

• Determine the business processes or requirements that are critical for business success and focus attention on improving these
• Plan organisational changes which address the immediate business climate requirements
• Build on the strengths of the current structures and remove blockages, swiftly
• Clarify spans of control, reporting lines and priorities so that accountability is clear
• Test any new structure proposals and processes with scenarios or transactions that impact critical business areas, in particular, from a customer perspective.

Performance management

• Succeeding in difficult times is all about effective leadership. Leaders must be seen as role models embodying the organisational response to the situation
• Executives need to be inquisitive about the conversations their line managers – team leaders, supervisors, managers – are actually having with people
• Line managers need to be precise with people about what they need and should initiate proactive conversations. This involves line managers getting people to do things differently
• Line managers should work with teams to determine which activities should be stopped to create time to start addressing new priorities
• Line managers should give people a compelling 'reason why' and generate the self belief that they can achieve the stretching new targets they are setting themselves.

To win in uncertain times requires organisations to take action. If these actions destroy employee engagement then they are not likely to be successful in the short or long term. It is those companies that focus on maintaining employee motivation and engagement that will ultimately reap the rewards and be in a strong position to exploit the inevitable upturn.

Ben Thornton is associate partner at Atos Consulting