Balanced Scorecard Toolkit for Crisis Management

Companies all over the world are struggling today. The effects of recession on performance are very discouraging. Companies need to deal with these as proactively as they should.

The effects of recession on performance across all companies and industries are certainly being felt all over the world. In fact, there just might be no country anywhere that is not feeling the effects of the present economic downturn. There are even so many companies who have already declared bankruptcy and this does not exempt even the big ones. Yes, a number of multibillion dollar corporations have certainly dropped off the high pedestals they used to occupy and this has led to millions of people losing their jobs. Employees all over the world are indeed feeling the pressure and are getting more and more scared of the possibility of losing their jobs.

Global recession raises a lot of questions and only a few are given answers – and uncertain answers at that. Everyone in the professional realm struggles to be at their optimum just to survive these hard times, which we do not really know for sure until when it would last. You can even compare this scenario with Charles Darwin’s very own evolution theory, which outlines ‘survival of the fittest’. And anyone who can make it through this crucial period of time would certainly come out stronger. Companies are certainly not exempted from this rule. Struggling to survive as best as they can, companies would then have to employ certain strategies just to stay afloat and swim through the rough waves. Cost cutting is inevitable here so there is always that possibility of companies laying off people. Likening a company to a ship that has too many passengers onboard, some of them need to be taken off the boat so that the majority of the passengers and the boat itself can survive.

The act of laying off workers is certainly one possible and commonly experience effect of recession. This, in turn, can do a lot of damage on employee morale. Once laying off starts, employees just might find themselves at the losing end of the equation so most, if not all, would start looking for other companies to work for. Of course, most would still wait until they get the boot because the chances that other companies would be hiring in this dire time of recession would still be slim. However, because employees are starting to look somewhere else, then they would be distracted and would not be able to work as productively as before. Moreover, they would not even be motivated to do their jobs well. With employee morale degrading, driving employees to perform at their best would certainly be made more difficult.

Moreover, the perks employees used to enjoy would also be minimized. Those benefits in the form of retention allowances, incentives, and bonuses – all these and more would have to be withdrawn or frozen for the time being. And you would not even be able to say for yourself that these benefits would be placed back in the picture when the global economy would finally start improving. Hopefully, these would be retained by that time. The effects of recession on performance are certainly discouraging in nature. That is why companies need to do all that they can to handle the passing of this economic downturn as well as they can.