Zappos, the quirky Las Vegas–based online shoe retailer (now a part of Amazon.com), has always had a reputation for being a fun place to work.40 However, during the economic recession, it, like many companies, had to cut staff—124 employees in total. CEO Tony Hsieh wanted to get out the news fast to lessen the stress for his employees. So he announced the layoff in an e-mail, on his blog, and on his Twitter account. Although some might think these are terrible ways to communicate that kind of news, most employees thanked him for being so open and so honest. The company also took good care of those being laid off. Laid-off employees with less than two years of service were paid through the end of the year. Longer-tenured employees got four weeks’ severance pay for every year of service. All got six months of continued paid health coverage and, at the request of the employees, got to keep their 40 percent merchandise discount through the Christmas season. Zappos had always been a model of how to nurture employees in good times; now it showed how to treat employees in bad times.

When the economy is good and organizations aren’t feeling the pinch of meeting performance goals, financial and other incentives are more readily available. However, economic recessions can be difficult for many organizations, especially when it comes to their employees. Layoffs, tight budgets, minimal or no pay raises, benefit cuts, no bonuses, long hours doing the work of those who had been laid off—this can be the reality that many employees face. As conditions deteriorate, employee confidence, optimism, and job engagement plummet as well. As you can imagine, it isn’t an easy thing for managers to keep employees motivated under such challenging circumstances.

In an uncertain economy, managers have to be creative in keeping their employees’ efforts energized, directed, and sustained toward achieving goals. They are forced to look at ways to motivate employees that don’t involve money or that are relatively inexpensive.41 So they use actions such as holding meetings with employees to keep the lines of communication open and to get their input on issues; establishing a common goal, such as maintaining excellent customer service, to keep everyone focused; creating a community feel so employees could see that managers cared about them and their work; and giving employees opportunities to continue to learn and grow. And, of course, an encouraging word always goes a long way, as well.