In a downturn morale can take a hit, but confidence is vital for performance

There are many all too obvious tangible effects of a tough climate; sales founder and profits slump. But one less perceptible side effect is the damage it can have on staff morale. Unless your workforce is upbeat, asking them to rise to the challenge of trading a business through tough times becomes even more difficult.

A good way to start is by being honest with your staff. Keeping employees in the dark about economic realities only helps fuel speculation about factors such as redundancies and pay freezes.

Liz Campbell, practice director of HR consultancy Lane 4, says that being open will have a positive effect on morale. “If there are difficult messages to be delivered they need to be delivered. Leaders should give staff the opportunity to speak face to face. It’s fine for a leader to deliver a message in front of a large group but it’s also important to have the personal touch.”

Inevitably, many retailers will have to find ways to communicate bad news. Doing that in the best way possible is crucial in maintaining workforce morale. B&Q HR director Liz Bell says that when B&Q announced a disappointing set of results at the end of last month, one of its first priorities was to speak to staff. “We had to tell people that the results weren’t as good as we had expected and we had to be honest and own up.

But we also said: ‘These are the things we are going to do about it’.”

Communication can be a challenge – particularly for those large retailers with hundreds of stores throughout the country.

B&Q is being creative about the way it communicates with store staff. In February it launched an online forum on which any member of staff can leave messages. B&Q is also one of several retailers whose chief executive has their own blog to talk to colleagues, and which provides them with an opportunity to respond.

It’s also important not to overlook the basics of effective management, such as giving recognition to staff achievements. Campbell explains: “Recognition doesn’t need to cost lots of money. You need to think about how you’re going to build performance. Confidence and performance go hand in hand.”

She adds that if colleagues are not hitting their targets, that doesn’t necessarily mean they’re underperforming. “It’s a difficult economic climate,” she says.

Another important factor in maintaining morale is helping people cope with pressure. Campbell says: “It’s about helping people thrive under pressure. People need to understand the difference between pressure and stress.”

What’s clear is that if nothing is done about morale in difficult times it will only deteriorate.