updated 11/12/2008 3:10:31 PM ET 2008-11-12T20:10:31

Managing employees during a bad economy is difficult, and managing them through the holidays can also be a challenge. Small business owners may find that doing both is particularly rough this holiday season.

The employee issues that tend to come up during the holidays, such as productivity dips and time off, can create more tension when business is down and the boss is hoping to get as much work done as possible. There's also the sad fact that layoffs often happen during the holiday season, and employees may be hoping for raises or bonuses that companies just can't afford.

Owners who are worried about receivables and cash flow understandably may not be feeling in a holiday mood. Human resources and management consultants say it's a good idea for owners to keep their nervousness to themselves — bad behavior can look even worse when it happens during the holidays.

"If they are experiencing anxiety, that's going to be replicated faster than they can imagine across their staff," said Lisa Aldisert, president of Pharos Alliance, a New York-based consulting firm. "Since every owner has some anxiety, they have to be additionally mindful and careful of their tone of voice, their facial expressions, their body language so that they're not saying one thing and meaning another."

Aldisert said employers who treat staffers with disrespect or who are unpleasant stand to lose their most talented and valued workers.

"When the economy turns, those people are going to be the first ones out the door," she said. "If anything, this is a time when employers should do anything they can to express their appreciations and recognize the talent they want to have in the company going forward."

Owners can make a mistake out of fear or uncertainty, and it can register as a hostile act with workers. This certainly applies where layoffs, or the possibility of layoffs, are concerned.

Many HR professionals agree that it's a bad move to shock employees by abruptly telling them that they or their co-workers are being laid off — something that happens when a boss keeps putting off what's understandably an unpleasant task. It's hard enough for workers to deal with that kind of surprise at other times of the year, but during the holiday season, it will enrage everyone, including the staffers who still have jobs.

Most consultants advise owners to let the staff know the company's situation long before it gets to the crisis point, which might even help avert layoffs. Employees can help turn things around; they often have ideas about how to get the work done better and cheaper, and, since they realize their jobs may be at stake, they can be motivated to help the company.

"They should get all hands on deck as far as discussing the environment, which can help the business and help the employees in the business understand," said Rick Gibbs, a senior human resources specialist with Administaff, a Houston-based company that provides human resources outsourcing.

HR professionals differ over how much notice to give employees about being laid off — in some companies, employees are told to clean out their desks immediately. Patty Hilger, vice president of human resources and operations for Genesis Consolidated Services Inc., a Burlington, Mass.-based HR outsourcing provider, believes the current environment calls for an extra dose of humaneness.

"The job market isn't what it used to be — people may not have savings to fall back on," she said. "I would rather err on the side of giving people notice."

It's also a good idea to let employees know soon that they're not getting yearend bonuses, although many workers are likely expecting that to be the case. But Gibbs said companies that can't afford the cash can nonetheless reward staffers for their hard work.

"They might want to consider more flexible hours, allowing people more time with their families," he said.

Productivity can be an issue during the holidays because employees are often distracted, thinking about buying gifts, juggling family visits and trying to get away from work to attend holiday events at school. Many hope to take a few minutes out of the work day to do some online shopping.

That can rankle an owner in the best of times; now, it may be maddening to a boss who needs staffers to focus on bringing in more revenue.

Gibbs argues that a little flexibility and tolerance at holiday time will help a company in the long run. For example, giving workers a break during the day to do their shopping or run an errand is likely to make them more, not less, productive.

"It's a gesture that probably doesn't cost a lot, and it acknowledges that the holiday season is going on," he said.

And there's the issue of days off — most workers want time away from work during the holidays, while an owner may feel this is just not a good time for that.

Hilger suggests some compromise and creativity. She suggests asking a staffer, "is there a way you can use half a day instead of a full day? I'll feel better and you'll have the afternoon."

"If you want to invest in your staff and their satisfaction, it's helpful to give a little in terms of flexibility and time off," she said.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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