HR managers are currently facing a number of staff Challenges, such as having to make redundancies, reduce staff working hours or cut salaries, or in some cases having to implement all three steps.

The first question must be: “why do we need to motivate and reward people?” The answer is that it impacts on the performance of the organisation. It is how you keep your best talent.

And that is something else to worry about, on top of the day-to-day pressure faced by already over stretched HR managers. When business is bad, your best people get twitchy. They struggle. They start looking around for something better to do.

As demoralising as this may at first appear, it's important to face reality. It's tough out there. But remember that people have greater faith in a manager who has a grip on reality than in one who does not.

Is it an impossible task to motivate and reward people if the reality is that there are budget cuts? It may be if you only look at the problem in a commercial context. If the piggy bank is empty, there is no point turning it upside down and shaking it. That will only waste energy and leave you and your colleagues feeling disappointed and frustrated.

I mention the word "feeling" quite deliberately. Feelings form part of the cultural context for an organisation; and rather than look at the problem in a commercial context, where there may not be a readily available solution, it may pay to consider it in a cultural one instead.

Why? Well, feelings, especially positive ones, don’t cost anything. How people feel about the organisation that they work for directly affects their contribution to it – and their contribution affects the performance of the organisation. If they feel positive, they will generally make a positive contribution – and in the middle of what is a severe recession that could mean the difference between survival and failure.

Research has shown that we tend towards and feel positive about those people (and organisations) that have our interests at heart.

So how can we create positive feelings and harness those feelings so that the performance of the organisation is enhanced?

In his latest book: "Why Feedback Doesn’t Work and Other Surprising Lessons from Latest Brain Science", Charles Jacobs argues that there is a link between ethical behaviour (of management) and an organisation’s performance and profit. He goes on to say that: “ethical leaders garner more support and get more done, so their organisations perform at a higher level and make more money”.

Jacobs also argues that “the neurotransmitter dopamine, responsible for pleasurable feelings, is released not when we receive monetary reward for our work, but when we are fully engaged in the work itself.” So there we have it.

At times like this we should focus on (a) good ethical leadership and (b) engaging people with their work; rather than on their monetary reward. Seems simple enough – or is it? Possibly it is.

Let’s consider first what we do with our best talent. Clever, creative people want to go work and have fun. They can be difficult to manage at the best of times and if there is not much fun around the chances of keeping them may be small.

There is some good news though. Clever people need organisations. They generally need a high level of organisational protection. They are most effective when they are well led. There it is again, good leadership.

To answer that particular question, let’s go back to Charles Jacob. He asserts that “our feelings have a tendency to trump our reason” and that “if we use logic to influence people unconsciously driven by emotion, we probably aren’t going to be very successful in getting them to embrace us”. Good leaders should focus on emotion rather than purely on logic is the clear message. In other words, use emotional intelligence to get the best from emotional capital.

If we can get our people to embrace us as a leader through understanding and harnessing the power of emotional capital (through emotional intelligence), then we can use the same skills, and focus, to help our people to embrace their work.

Firstly, consider the problem in a cultural context. Secondly, face reality and be open and honest. Thirdly, focus on people’s feelings and emotions; use emotional intelligence to unlock the emotional capital of your people. Fourthly, lead people in such a way that they know you have their best interests at heart. And finally, don’t forget to tell the finance director that it has cost the organisation nothing. He/she won’t find emotional capital anywhere in his profit & loss account or in the balance sheet.

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