A few blog spots ago I mentioned the fact that 41 University of Scranton Management 351 students had submitted potential material for this blog, based on an assignment entitled: Management Issues in an Economic Downturn. The top three, which best “fit” the style of this blog, as well as stuck to the topic, have now been selected and will appear over the course of the next three days.
Today we feature Christopher Baginski’s blog entry. Christopher is a Junior Accounting Major from Wallington, NJ.
I am quite sure that we all know about the devastating economic recession that has recently plagued our country. The stock market has taken a tremendous tumble, at one point falling 50% below its previous peak. This has caused terrible problems throughout the world. These problems extend to each and every one of us personally. In addition, this downturn has greatly affected businesses, especially in the areas of management and human resourcs.
Businesses measure success by production and profit. Production here is the key. Production leads to profit. So it comes as no surprise that many business leaders dedicate much time, energy and thought to find ways–or to create situations–where productivity can be enhanced. One such way to enhance productivity and profit is to increase employee morale.
It is a commonly held belief in many companies and amongst many executives that happy employees work harder and more efficiently. The task of increasing employee morale falls to the managers and human resources departments of companies. In the past, when the economic outlook was much brighter, managers didn’t have to do a great deal to make employees happy. They were to show employees respect, build friendly relationships with them, and perhaps compensate them (increase/bonus) for good work.
However, we are no longer in good times and the demands of employees have shifted. Managers must now face different issues and work much harder to maintain employee morale. The results of a poll about employees’ concerns in the downturn done in November 2008 were featured in the February 2009 edition of Workforce Magazine in an article entitled “HR in the Downturn.”
The poll listed the impact of the recession on retirement plan investments as the most significant concern of employees. Also mentioned as concerns of employees were the impact on the organization overall, job security, and the impact on employee merit increases in the coming year.
(Instructor’s Note: To add to Chris’ blog entry, follow up with a trip to this on-line article on the impact of recession on employee communications.)
While in my Intermediate Macroeconomics class the other day, my teacher said that when people worry about their nest egg, they stop spending, start saving, and the economy goes into a stall. This statement is supported by this poll. People are afraid that they will spend their “golden years” at work. They are also constantly afraid of losing their jobs. Without income steadily flowing into the household, what will they save, and more importantly, how will they survive?
This is where the effect on the field of management can be seen. Managers are spending more and more time assuring their employees that their jobs and their pensions are safe. Several human resource departments are holding seminars for employees designed to educate them about financial planning, focusing specifically on managing retirement plans. With extra time being dedicated to allaying fears of employees, managers are now faced with the difficulty of maintaining production levels and employee morale. These challenges are a direct product of the economic recession and a perfect example of how the management field has been affected by it.