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The High Cost of Low Morale and What to Do About It

Studies have shown that low morale can lower workplace productivity by as much as 12 percent. There are other costs as well, such as turnover and customer attrition resulting from poor service. But work is work, right? While it’s true that the job has to get done, there are a number of things employers can do to improve morale without sacrificing business goals.


Here are some of the most critical factors in boosting and maintaining good morale:


Frequent and open communication is a strong indicator of employee morale, and it’s absolutely essential to engagement. A survey reported in HR in Asia revealed that the companies with the most engaged employees share common best practices for communication:

  1. Feedback: Feedback is important to employee morale: People like to know how they’re doing. The top three feedback tools used by companies with high employee engagement include performance management programs, recognition programs, and an annual employee survey. In fact, businesses with high engagement are 15 times more likely to conduct an annual employee survey than businesses with low employee engagement.

  2. Follow-up: Just conducting a survey isn’t enough, however. Employees want to know that someone is actually looking at the results. Employees whose managers followed up with them after an employee survey were 12 times more likely to feel engaged going forward.

  3. Face time: In companies with highly engaged employees, 86 percent of managers conduct one-on-one meetings with their employees. In businesses with lower levels of engagement, only 50 percent conduct one-on-one meetings. Disengaged businesses are also more likely to use email.

Employees can’t feel a sense of engagement – or ownership – if they don’t know what’s going on or how they fit in. That’s why open, consistent communication is such a key component of employee morale.


If the only time employees get feedback is when they’ve done something wrong, morale is sure to be low. Take the time to “catch them doing something right.” It doesn’t have to be anything big or expensive – even something as simple as a well-timed compliment can go a long way toward making employees feel appreciated. But be careful not to reserve your praise just for the superstars. Work to find something to praise in each employee.


People are more productive when their basic needs are met so that they can work in comfort. That doesn’t mean that you have to spend a lot of money investing in ergonomic office furniture (although that would help, too), but it does mean paying attention to things like lighting and temperature. It’s also important to make sure employees have the tools they need to do their jobs.


Employee satisfaction improves when workers believe their leaders see them as real peoples – as individuals – rather than as interchangeable workers getting the job done. One way to do that is by recognizing important events in employees’ lives: marriages, births, graduations, etc. Following up with an employee after a personal crisis is another way to show that you recognize him as a person with a life that exists outside of work. However, it’s also important to be authentic yourself while doing this. If employees perceive your interest to be fake, that could actually damage morale.

The tougher competition for top talent gets, the harder companies are going to have to work to recruit and retain that talent. Large corporations often throw lavish parties or hand out cash incentives, but that doesn’t mean smaller companies with lower budgets can’t compete. Treating your employees like the individuals they are is both effective and free.

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