Companies Under Crisis. How to Motivate Employees Whilst Facing Restructuring?

Abstract or Introduction

In 2018, 19,552 companies filed for insolvency in Germany. Reasons for this can be found in the lack of objectives in controlling and in the effects of poor management styles during restructuring. This figure can also often be attributed to the alternating relationship between corporate crises and employees. Destructive feelings arising from the crisis, such as anxiety and stress perception of the employees, resulting in a lack of motivation, which further accelerates the crisis process by reducing the productivity of a company. Against this background, it is important to find ways to motivate employees during a restructuring process in order to ensure that it achieves its objective of protecting the company from insolvency.

The objective of the study is therefore to understand the motivation of employees in the context of a company crisis.
The paper aims to give the reader a theoretical insight into the phases of a company crisis and then to show the resulting effects on employees. Building on this, a method for motivating employees is presented, which is then applied in practice in a concrete example of a medium-sized company. The application of the method is only explained and illustrated in the course of the practical context. The aim of the work should not be to demonstrate the effectiveness of the method itself. Rather, the aim is to investigate the significance and implementation of employee motivation method in connection with a successful restructuring method. At the end of this paper, the reader will be shown the practical application of the used method of employee motivation in a company restructuring. This should finally answer the question of how employees can be motived when a mid-size company is facing re-structuring.