The Cost of Low Morale And How to Improve It

The Cost of Low Morale And How to Improve It.

Last week I wrote about the cost of staff turnover. This week I wanted to talk about morale. Obviously, low morale leads to turnover but before that low morale does real damage to a company’s bottom line. Not only that but low morale is extremely contagious.

According to a Gallop Poll and report by Wesleyan University in 2014 there were 22 million disengaged employees costing the economy up to $350 billion a year in the form of lost productivity.

Facts. Morale or motivation is the willingness, attitude, and energy the staff takes during the day as they approach their tasks. Does it seem like staff is working or posturing. People work when morale is high and posture when it is low. Morale drops for many reasons including: underpaying them, overworking them, leadership issues (demanding, demeaning, absent), layoffs, negative view of the company’s future, lack of resources (no training, fun perks etc), toxic staff, major changes in approach or product, lack of any change/challenge, and no upward momentum. Basically if employees don’t enjoy who they work for, what they are doing, and see no end at the end of the tunnel morale drops.

Reactions? People should not be surprised by the Gallop numbers. The news is constantly sharing CEO salaries and bonuses in the millions at companies where staff bonuses and raises haven’t been given in years and starting salaries and benefits continue to drop. No wonder morale is rough. Greed is a morale killer.

Signs of Morale Drop are obvious when you look close. A drop of energy or excitement, gossip, lots of turnover, missed goals and targets, upset customers, staff showing up just on time and leaving exactly at close. One employee with no/low morale is a drain on others who have to step up and do more work to cover for that employee, bringing their morale down because they are being paid to do the work of two.

Quick Fixes. Reward the good, re-motivate the stagnated, and drop the dead weight. If you view employees as a cost and drain they will view you and the company the same way. If you view them as productive valuable resources and pay them fairly, they will be that type of resource. Company retreats in a low morale situation wont do much. It forces people to be where they dont want to be, on personal time. Some employees are save-able and some are not, figure out who is who.

Improving Morale. Set up new goals with clear rewards, think of bonuses for the deserving and solid veterans, find out who is a troublemaker that doesn’t produce, think about improving the product or service so employees can be proud of it, think about profit sharing, and raises. Are staff comfortable? Breath new energy into the place if it looks dull. Most importantly, call people in and ask them to speak candidly about how work could be better.

Conclusion. Often and understandably, leaders convince themselves that they are doing a great job, the company is perfect, and any issues are because the staff is just ungrateful or lazy. While leaders are in that bubble of bias productivity and profit will stay low until leaders embrace the potential of actual morale issues. Low morale happens and is recoverable, if leaders do the right thing and remain objective.

Good luck,

StraightUp Strategy

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