How To Be A Good Boss in Bad Times

Regardless of what sort of business you run, the people you employ are core to your business’ growth and future success. However, in the current economic downturn, where profits are being squeezed and downsizing is inevitable, we investigate whether is it possible to make unpopular decisions, while still maintaining staff motivation.

The UK’s credit has begun to crunch and it is a difficult time for the SME sector. Many small businesses are adopting survival rather than growth strategies and subsequently, cutting costs has become the top priority. Redundancy, pay cuts and salary freezes have become the tools of choice for many businesses’ struggling to survive. Even for those companies who are maintaining profit levels, the constant threat of an uncertain economic future, means that they are reluctant to raise salaries and give employee bonuses. The problem arises when lack of salary increases and bonuses, translates to high staff turnover and a decrease in productivity.

Does Motivation Lead to Innovation
On closer inspection, it would appear that staff motivation is not completely dependant on money. Charles Aitkin, of London based sales company NewBiz,suggests that there are methods of increasing staff morale cost effectively.

At the beginning of last year Charles decided that, in the wake of the credit crunch, commission would be proportionately less and harder to achieve – while competition would be tougher. Consequently, he wanted to offer his team a form of visible reward that went beyond cash and increased motivation.

NewBiz began to run a quarterly sales competition, the prize of which was an ‘experience voucher’ redeemable against anything from driving a Ferrari to a wine tasting evening. Though, establishing a formal way of measuring the success of such a scheme is difficult, Aitkin believes it was a resounding success.

“While we can’t exactly measure the success of this strategy, you see it is working by the excitement that surrounds the event. Our team have provided feedback that suggests that it makes them strive more, especially when it is coming up and there is not much in it between a few of the sales people. From a business perspective, the cost of this scheme is low in relation to the sales and motivation it generates.”