Management of Employees during Economic Downturn: A Literature Based Review


  • Augustine James Katiti Kenya Methodist University


Employee, Management, Economic Downturn, Literature Contingency theory


During challenging economic times such as economic downturn, many companies struggle to stay afloat while the employees worry about losing their jobs. Management has the tough task of finding ways to keep employees loyal and productive while assuring them that they can survive the challenging period. Management of employee is one way to help turn an underperforming employee around or prevent high-performing employees from becoming a weak performer. The purpose of this study was to examine the management of employees during economic downturn. The study was anchored on Contingency theory. The study was a literature based in which past studies were reviewed to obtain study themes. The findings of the revealed studies revealed that communicating with employees and rewarding them for a job well done is always key in motivating the employees to stay with the organization even during economic downturn. All of this can be accomplished by being visible, and by taking the time to get to know the employees. The findings of the reviewed literature indicated that great leaders never lose sight of the big picture, instead they balance the need for financial prudence with maintaining a loyal and engaged work force. It was found that great leaders recognize that no matter what happens in the economy, there is always a market for high performers. Making tough financial decisions may be necessary during times of economic downturn, but the management should keep in mind the economy will turn around and that the work will come back, and when it does, the employees will remember how they were treated during crisis. The findings further indicated that keeping employees engaged despite the economic turmoil is key because engagement is directly linked to the performance metrics that matter most to businesses during economic downturn. The study hence concluded that, walking the talk and building relationships of trust and instilling confidence equates to real money on the bottom line; it is a statistical fact that high employee engagement results in greater efficiency and overall profitability in times of economic downturn. The study concludes that employee engagement can inoculate business units and companies against lost profitability and the onus of creating that engagement is on managers, who are the epicenter of the work environment.

Keywords: Employee, Management, Economic Downturn, Literature Contingency theory

Author Biography

Augustine James Katiti, Kenya Methodist University

PhD Candidate


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How to Cite

Katiti, A. J. (2020). Management of Employees during Economic Downturn: A Literature Based Review. Journal of Human Resource & Leadership, 4(2), 70–87. Retrieved from