Trust is strengthened transparency, with the proven truth and sustained over time. Employers in family firms are more likely to be transparent and credible by proximity to their staff.

However, large companies can also approach your employees know their lives , making them protagonists of each achievement. This is the case of Renault , which uses a Global internal magazine .

To develop an internal communications in line with the other terminals of the company, Renault Argentina edits the journal Global. It is intended for company staff worldwide and suggests that all employees know what is happening in Paris, Romania and Japan.

This communication tool strengthens the bond between the employee and the company, and also strengthens the sense of belonging. It is an action constant motivation, he discovers a very dynamic and innovative company that is always one step ahead. This magazine, in 2001 a Special Mention at Eikon Internal Communication Awards for excellence in corporate communication.

The key role is the role of managers! They "must learn how to use the business cycle for competitive advantage." Three steps toward the goal are given in details!

http://sloanreview.mit.edu/article/recession-proofing-your-organization/

Dear Federico, Indeed communication is a powerful tool for promoting transparency between employer-employee relations. All human beings have resilience be determined during difficult times. If they feel genuineness about the market conditions that the employer faces, they are more likely to empathize and cooperate with the employer.

Dear Debi

It is a tough situation. As mentioned in the article that you have quoted, people would like to abandon a sinking ship. So what can be done? A few I thought could help are:

1. You should inform your employees about the correct situation. Rumors would be more dangerous. Let there be free dialog where the concerns of employees could be addressed.

2. Obviously in a downturn the workload gets reduced and your immediate reaction could be to downsize. If you can retain them and deploy them in different jobs, the loyalty of the employee to the organization will increase. That way you keep the valuable knowledge of the employee with the organization.

3. Remain ethical during the harrowing period till you come out of the downturn. Employees would greatly appreciate that. Keep the management at all levels as transparent as possible. Let the communication go unhindered both ways.

4. Inspire your employees to achieve great things by motivating them to innovate. Believe in their capabilities. Let the employees use their strength in their domains to provide more value to the organization. Give more value to the employee and he/she will give more to the organization. Honor all your commitments to them.

5. If possible, depending upon the level of downturn implement flexible work schedules, hours and plans. This will help employees to plan and control their activity around what is good for them and for the company.

http://www.shanghaitherapists.com/retaining-great-employees-during-a-recession-is-important-too.html

http://www.businessweek.com/stories/2008-10-22/managing-employees-in-a-downturn

Here is another good advice from Boston Consulting Group about engaging employees during downturn.

http://www.bcg.com/documents/file28214.pdf

The POC of the employee is their Immediate Superior; the competencies of those superiors in communicating with their subordinates creates the net worth of engagement during downturn...

I agree with the contents of the article "Recession-Proofing Your Organization" presented by @Ljubomir.

Dear Krishnan

You are quite right. It is said that people leave bosses and not organizations. The most conspicuous reason for this is lack of transparency and fairness on the part of the boss. many people, as you say very rightly, do not indulge in proactive communication with their subordinates. Consequently, people do not feel motivated and get alienated. That is why, a large number of companies are focusing of building leadership competencies in their managerial and supervisory staff. That is a more holistic solution

It is the superior-subordination relationship, that can be very critical in inspiring the employee and fighting the onslaught of the downturn. This is also include the ability to proactively communicate as also inspiring through other ways.

http://web.a.ebscohost.com/ehost/detail?vid=23&sid=e5928b70-7e37-4299-9e9d-15d598c64754%40sessionmgr4004&hid=4106&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=bth&AN=2051051

Already many good ideas are posted. I would like to add a scholium: We should take into account the severe of the downturn. For example in Argentina, many hotel owners left their hotels and the workers run the hotels in a self management way. Depending of the crisis, there should be a plan to save the organisation, which give more managerial involvement to employes, in a transparency environment. No downsizes, but rather accept by all reduce of salaries, until the firm is OK again.

Dear Nageswar: your attached papers are excellent, and of immense help in clarifying many issues.

Dear Costas, Thanks for your thoughtful post and your insightful salvage plan, that involves a kind of workers' cooperative for running the organization. Interestingly, we in India had a lot of excitement among workers about the formation of cooperative during the 1990s. But not even one year passed on satisfactorily and eventually the factory had to be sold off.

Dear Debi

Having confidence means having confidence in someone or a scheme, and in this case, has to do with having confidence in the organization. The employees of a company should know what is happening because if they become familiar with what is happening, they will be in the healthiest position to protect the company at any time.

Factors that can destroy trust in organizations include betrayal, deceit and lack of dialogue. Communication is a must for the organization you want to reap the dividends of a good working environment The question of the company's financial health should always be open. Nothing should be hidden.

Trust is the foundation on which all relationships are built and interaction

I do believe influential employees could take the role of maintaining gesture, posture, and doing under pressure, besides providing rewards for being patience.

Dear Shafig: thanks a ton for your attachment. It is indeed very interesting. I am in total agreement with the intervention the writer in it suggests for building the trust.

I think, most of the managers forget that in crisis situations, the critical thing is reassurance to the one who is fearful, unsecured and apprehensive. There is no better intervention for that than meaningful and impacting communication--which should be honest, transparent, credible, and timely. It should not be just one-time expression of empty sympathy, but must be supported continuously and with commensurate body language. When people are convinced that crisis is inevitable and has to be faced, they learn to manage it better and more courageously. That is the role empathy plays when we empathize with a person in grief.

I forgot to read Dear Nelson's post before writing the above thread. he is totally in line with the Suasan's blog attached by Shafig. He rightly mentions that the factors that can destroy trust in organizations include betrayal, deceit and lack of dialogue; and correctly opines that communication is a "must" to confront the situation.

The three beautiful words dear Kamal uses for building trust are also worth noting: transparency, fairness and justice. They need to underlie all attempts to communicate as to how to save the sinking ship. Thanks Kamal.

Surely, @Ra'ed Masa'deh' s empathetic gestures and postures fall in the same category.

Trust has nothing to do with upturns or downturns, but in a growing / prosperous company it is quite easy to look like if there was trust when - in reality - there is none.

While bonusses rise, and things are great, people will be quite happy. This does not mean that the management was able to build real trust. Its is just that people bevlieved that they were doing their job not so bad or, at least, that in a situation like that a trained monkey wouldn't do much worse, which is the ugly sister of real trust.

In companies like this the onslaught begins when the economic situation gets worse. Then, the absence of real trust becomes visible.

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If you were responsible for managing a company within turbulent times and want to build trust even in troubled times, the same rules apply as for good times: Be trustworthy, be honst, be thoughtful and be good at what you do. Then trust will come by itself. But, it surely is harder to show these qualities in bad times.

Dear Andreas

You are absolutely right. I fully agree with you. It you win the hearts of your employees through trust they are prepared to do anything for you.

But most employers have unrealistic expectations from employees without building the trust. That will not work. Trust, integrity, honesty, transparency for formidable potential,

Need to identify the level of toxic among the employees, if found to be high, and initiatives taken to reduce it down significantly , will definitely lead to improvement in trust. However, if already a low level exists for the toxic nature of organization, its difficult to keep employees stay back to the organization, even if he/she trusts the organization and its employees while getting a much better opportunity to grow and develop in career at some other organization.

Trust is important among employees and during any downturn, it is most essential. It doesn't develop overnight. It has to be built slowly and step by step. It may build up naturally but during crisis, it's manifestation is more. It can be developed through actions and words and examples.

I completely agree with Jaya Ma'am and Kamal sir, but can we have something like an continous and indirect Trust audit among employees?

It is a really a tough situation. The shortest way and the first thing we should do is to inform employees about the actual situation so as to prevent rumors.

Trust is like an equation. So, both sides i.e. workers and managers should make efforts to boost it up. The best recipe would be perhaps, interaction and conversation in the stated scenario of the question..

Just before the downturn or during the downturn:

1. Discuss with employees the situation and prepare a road map

2. People cry; machines don't cry. So downsizing, if necessary, start with processes, procedures and equipments

3. Motivate with non-monetary incentives for sincere and selfless performances

4. Military Generals Pep talks spruced with reality can help to overcome sagging morale

Rest leave it to God!

In my opinion, trust is better installed in employees in the first few months of their career.

They must understand the simple facts of life (bloomy & gloomy, ups & downs, sickness & health) which apply as well to companies & firms. When the situation is rosy, then they can ask for more privileges and when the situation is tight, they have to be more tolerant. It's better to light a candle than curse the darkness; by the combined effort of all concerned, they have a good chance of passing through harsh times.

I was once told that groups are made by convenience, but teams are forged by shared victories and losses. Savvy leaders have an opportunity to the change the climate and perceptions regarding downturns. Instead of allowing employees to wallow in fear an uncertainty, leaders need to instill in employees the sense that that is a firm understanding of the new environment and a plan of action. This is accomplished by effective communication and engagement. Additionally, employees should not  perceive that that first course of action is to downsize. 

Sometimes, one just has to read out the words the get an answer: If I want trust, I will have to give employees things to trust in. My words must be trustworthy, this is a bare necessity. But trust is not only a spychological thing, it also has something to do with whether they have trust / faith in my decisions, because - obviously - the could be wrong.

So, the first question is: Where does the downturn come from? If it is caused by faulty management (and that's the truth in many stories), people would be quite stupid if they developed any trust in the same people now deciding in the other direction. So, at least there have to be some serious staff changes to regain some trust.

The whole trust discussion (trust as a topic of economic research) is seriously misguided. There are a lot of research papers that show that there is a correlation between the level of trust towards the management and the economic situation of the company. But correlation does not always mean cause & effect, and even if it means cause & effect the direction of cause & effect if doubtful.

I doubt that the economic situation of companies is good BECAUSE there is a lot of trust towards the management within the company. I assume that people do believe in their management doing the right things (in other words: they trust) BECAUSE the situation is good and therefore management seems to be doing the right things.

So, to mainatin or even develop trust in a downturn, one will have to seriously sort out which decisions lead to the downturn and if the right measures were taken to overcome that downfall. If the right things were done, trust will develop automatically. If all that comes from that re-thinking of what the company is doing is a cost cutting program, trust will not develop - and people would be quite stupid if they really trusted in the same people ever again.