Managing people in times of recession.

Managing people in times of recession is very challenging. Interestingly the challenges that one faces in managing people in good times and in recession are the same but with a different outcome or end goals.
During good times the employees call the shots. Senior management and in particular human resource department needs to find ways to retain talent. Employees are happy, and are in good state of mind which invariably produces good results. Employees are continuously looking for self-satisfaction.
During the recession period the people are not in a good state of mind, they are very worried of the future. They work in fear of losing jobs, this shows-up in the quality of the output.
So, managing people in these two periods are quite different. It is important that during the recession period, managing people should be done with utmost care. If not done properly, it seems as though there is no obvious impact on the company in the short-term, however in the long-term there would be clear impact.