It's no secret that small business owners are facing difficult times. Sales are down in most sectors and just about everyone is tightening their belts and hunkering down in efforts to stay afloat. Every entrepreneur is stressed these days, and they're not alone. Employees, too, are aware of business declines, and they're worried about their job security and more.

Keeping your employees out of the doldrums and maintaining productivity has never been more difficult. Still, there are ways to minimize the anxiety among your employees and keep them working hard to keep things alive until prospects improve. Here are some ways you can ease their pain and yours at the same time.

Keep Lines of Communication Open. For employee morale, bad news is better than no news at all. Your employees are aware of the stresses your business faces, but they may not know the details. That situation breeds fear and rumors, and those breed discontent. In staff meetings or in written communications, keep employees informed about business conditions and your efforts to improve the situation. Strive to maintain a positive attitude in these communications.

Solicit Employee Feedback. Ask for and carefully consider employee suggestions on ways your business can save money and increase sales. You may be surprised at how many practical ideas you hear from your employees. They're in close touch with day-to-day operations and with your customers.

Get to Know Your Staff. Spend more time out on the floor and in the breakroom. In larger businesses, encourage supervisors to do the same. Find out more about your employees and their concerns. Nothing improves morale better than direct, positive contact with employees.

Hold Company-Wide Meetings. Order in food and hold staff luncheons in a town-meeting style. Open things up with a presentation on the state of the business, and open the floor for questions and suggestions.

Reward Productivity. Even if you have an incentive program in place, try adding to that with unexpected low-cost rewards for individual performance. Gift cards from popular retailers, company logo clothing, and other inexpensive bonuses can go a long way toward stimulating morale.

Set An Example. If you're asking line employees to give more effort or cut costs, make sure that you and other management employees are visibly doing the same. If you dig in, cut out unnecessary expenses, and put your nose to the grindstone, your employees will notice and be encouraged to pitch in.

Prepare Employees for Bad News. If layoffs or cuts in benefits are looming, don't spring them on employees at the last minute. Give them advance warning that the situation may arise and ask for suggestions. In union shops, communicate early with labor representatives. Employees may well be willing to cut hours or accept wage or benefit concessions if given time to prepare.

Make Layoffs Intelligently. If layoffs are unavoidable, make them smart layoffs. Don't lay off your most productive employees in favor of troublesome supervisors. Seniority may also not be the best criterion. For those laid off, offer any assistance you can to help their transition. This will pay off in better morale among retained employees.

Bad economic times are painful. There's no doubt about that. Keeping that pain to a minimum, both for yourself and your employees, should be a major goal. Keeping employee morale strong is one way to minimize business stress.

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