Why Company Morale is Important


Why Company Morale is Important

Company morale is how an employee feels about their workplace. This relates to their feelings about their managers, their long-term role in the organization, their benefits package, and the company culture. Many employers might argue that company morale is not important as long as the work is accomplished. However, before we shut it down so easily it is essential to see how company morale actually relates to company productivity and as a result company profits.

Is Company Morale Important.

The Gallup Organization in their analysis of over 10,000 business units and more than 30 industries found that individuals working at companies that receive regular recognition and praise showed an:

  • increase their individual productivity
  • increase engagement among their colleagues
  • are more likely to stay with their organization
  • receive higher loyalty and satisfaction scores from customers
  • have better safety records and fewer accidents on the job.

In addition, it found that for employees that are “actively disengaged” work cost the U.S. economy between $250 and $300 billion every year in lost productivity alone. When you add workplace injury, illness, turnover, absences, and fraud, the cost could surpass $1 trillion per year. Low company morale is therefore very expensive

So How do I increase company morale

In general, different individuals are motivated by different things, and it will be difficult to try to motivate each individual based on their distinct motivating factor. However, Culture IQ has identified some of the recognized techniques that motivate nearly every employee:

  • Celebrate employee accomplishments—When you appreciate someone’s efforts—whether it’s a successful project launch or working through the weekend—they tend to better appreciate the work back. Making someone feel good about their contribution is one of the most effective ways to motivate an employee.
  • Encourage team bonding—Successful companies offer fun perks that let employees form personal bonds while letting them take a break from the day-to-day. If you have a small team, you could buy pizza for everyone on Fridays and take a long lunch together. Some companies throw lavish quarterly parties, while others host team events like scavenger hunts or game days. It doesn’t have to be complicated or expensive. Even a simple happy hour gives your team a chance to bond and unwind.
  • Give autonomy—Empower employees to think and take action by themselves. When team members are encouraged to steer the direction of their work, they tend to feel more invested in the end result. Most employees feel like their manager has to give permission for every single decision. Not only does that lead to low motivation, but needlessly slow progress. So let your employees set their own goals, accomplish their own projects and—ultimately—feel pride for their own wins.
  • Reward employees when the company performs well—The most successful compensation programs give all employees a reward when the company sees financial success. This could be in the form of a bonus or equity package, as long as the employee sees that their work directly has an impact.
  • Promote healthy work-life balance—As much as possible, organizations should be flexible around commitments like family emergencies, doctor’s appointments and weekend plans. These small gestures make a big difference in how employees feel about the workplace. It also results in team members coming in on a Monday refreshed and focused.
  • Listen—Your team is a wealth of information. Listen to their ideas, their problems, and their frustrations. Some CEOs meet with every employee each year, while other companies send regular pulse surveys so they’re always in the loop.

Low morale leads to poor cooperation, low productivity and increased turnover. It’s an undisputed fact: If your employees aren’t motivated or happy, your business will suffer and fail to reach its long-term goals.

On the flip side, strong company morale has the opposite effect. A happy office environment is one that attracts the most talented workers, and when those works are motivated, they’re productive and rarely quit. Simply put, When You Care About Your Employees, They Will Care About Your Business.

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Read the Gallup study here

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