It's a double-edged sword if you work for a company that's impacted by the economy and perhaps has already gone through a round of layoffs.  On one hand, the resulting paranoia can be a good thing if folks are putting their nose to the grindstone and working hard (as well as smart).  On the other hand, as a manager you really don't want to be the armchair psychologist and field all the CYAs that can come with that situation, do you?

More on the tightrope that is fear in the workplace from Michele Conlin over at BusinessWeek:

"For some bosses, managing the fear and loathing has become a job in itself. Trevor Traina, a Silicon Valley entrepreneur who has sold startups to Microsoft (MSFT) and Intuit (INTU), now heads DriverSide.com, a Web site that provides drivers with everything they need to know to manage car ownership. Since the downturn, the offices of the San Francisco company have become a tableau of Boy Scout-like diligence. "I'm getting e-mails all day long that say 'I'm doing this and I'm doing that,' and it makes my job harder," says Traina. "Every time I turn around, there is someone sticking their head in my office reminding me what they are doing for me." Traina has taken to informing his staff on a daily basis that the company just secured another round of funding and that they should lighten up on the oversharing.

For some leaders, the paranoia is a kind of blessing. "The world's best innovation comes from the greatest desperation," says Tom Szaky, CEO of TerraCycle, a Trenton (N.J.) company that makes organic fertilizer and other planet-friendly products. Times are tough for TerraCycle, as they are for a lot of companies that supply hard-pressed retailers. "We have no money to hire anyone," says Szaky. He put the challenge out to his charges: Do more with less. Amp up sales without spending any money.

Of course, some managers are open to letting the fear work it's magic.  You know the type of magic, like employees sleeping in their back seats rather than at a Best Western:

So the TerraCyclers decided to become their own marketing machines, hitting the road and visiting stores in person. Normally, when TerraCycle staffers visit far-flung Wal-Marts (WMT) and Home Depots (HD) to check on displays and chat up customers, they take a plane, stay in a hotel, and expense their meals. But last month three members of the marketing department drove their cars more than 1,000 miles each instead. As if that weren't Grapes of Wrath enough: They also slept in their back seats.

Szaky says he has already seen a revenue jump. "Money is easy," he says. "It's good to starve companies sometimes. That's where innovation comes from."

Me?  I couldn't look any of my friends in the eye and tell them they shouldn't keep their boss posted on what they're working on and the value they provide.  The secret is finding the sweet spot at the intersection of communicating the value, the communication style of your boss and the tolerance for information overload that your boss has.  Some bosses don't mind the data, it's a simple "delete" on their email.  Others think you're a brown noser if you try that stuff.  Figure it out.

As for the backseat sleeping, are you kidding me?  What manager in his right mind thinks that's cool or appropriate, regardless of the times?  A Best Western costs 60 bucks.  You can't spring for that?

At least he could always recruit Matt Foley...