Entering an economic downturn changed the way of motivating employees. There is an increasing number of redundancies, lower wages and also more other demotivators. Leaders have to use the right tools for successful motivation. Thesis examines the present situation, and considers more effective motivation of employees in Slovenian wood firms. Using questionnaires set on the basis of motivational theories, the situation was researched. Selected theories were studied separately, then the results for the current situation was analysed. The analysis concluded that many factors changed, there is also more demotivation factors. After analyzing the results a proposal was presented, based primarily on better information on the state of business between employees and management, and improvement of certain basic needs for good communication suggested. Firms should better motivate employees by reducing demotivators, for the motivators they should use intangible motivators, cheaper and more appropriate for this period. Moreover, among management and employees a genuine and honest relationship, based on mutual trust and communication, should be created.