Massive layoffs and reduced pension payouts have helped corporate America trim expenses, but there’s been a cost—a disastrous new employee mindset. And the negative effects of that mindset—what today’s expert calls “psychological recession”—go straight to the bottom line.
“Psychological recession” is an “emotional state” that includes a “dour view of the present and an even bleaker view of the future,” says Judith M. Bardwick, Ph.D., a management consultant, psychologist, and author of One Foot Out the Door: How to Combat the Psychological Recession that’s Alienating Employees and Hurting American Business.
Job Insecurity at the Root
An alarming combination of depression and anxiety, the psychological recession starts with the loss of job security, says Bardwick, but then other insecurities pile on—such as a loss of pension or healthcare benefits.
What do employers get when workers suffer the double whammy of depression and anxiety? Low productivity, high absenteeism, employee apathy, and high turnover, the author says, leading to low (or no) profits. Performance declines significantly when people feel prolonged fear and the sense that no matter how well they perform, there’s nothing in it for them, Bardwick explains.
And when people are “perceived as a cost” and “treated as a liability,” and when no one seems to know or care that they are there, employees also don’t work well, and they don’t stay, she adds.
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Twenty Percent Do 90 Percent
Citing 2005 research from the Gallup Organization, Bardwick notes that 90 percent of a company’s profits stem from the work of only 20 percent who are engaged at work. Of the remaining 80 percent, research indicates that about three in five are not engaged, but they do enough to avoid getting fired, while the rest are “actively disengaged,” she says.
Changing Mindset First Step Toward Cure
Bardwick offers tips for increasing employee engagement, and for restoring confidence and optimism. The fundamental step, she says, is a return to viewing employees as assets. In addition, she recommends that employers do the following:
Strive for the best fit. Starting at the hiring stage, try to achieve the best match-up between what your company can offer and what an employee needs.
Strengthen boss/employee relationships. Focus on developing mutual respect and trust. The only way that happens is when people of different ranks solve important problems together, she says.
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Inspire and recognize leadership within the ranks. Demonstrate your commitment to helping employees become successful and self-assured performers.
Humanize the workplace and customize incentives and rewards. Find out what people really want, and do your best to make it happen, she says.
Of course, compensation is what many employees look at to see how they are doing and how much their company values them. In our next issue: The compensation complaints that come with psychological recession—and an introduction to a popular compensation