Learn how to boost employee morale and create a better company culture.
- Boost employee morale with employee recognition and development opportunities, clear communication and feedback, and employee health-and-wellness initiatives.
- Low employee morale is often caused by employee burnout and a lack of communication.
- Positive employee morale and engaged employees can increase profitability by 21%.
- This article is for small business owners who are struggling with company morale and want to enhance their team's optimism and overall satisfaction.
With stress, anxiety, and uncertainty at high levels right now, it's important for businesses to seek morale-boosting measures to establish and maintain a happy workforce and a positive company culture. If your business is suffering from low employee morale and burned-out workers, there are several strategies you can implement to improve optimism and boost employee satisfaction.
How to boost and maintain employee morale
If your team's morale is dipping, it's time to make some changes. There are several strategies you should implement to boost and maintain employee morale. Rather than think of these methods as one-time solutions, integrate them permanently into your company culture.
We spoke with business leaders to identify 10 ways to boost and maintain employee morale. Here's what they advised.
1. Align your employees with your company values.
Although many business owners subscribe to the false notion that employee morale is based on gifts, free food, ping-pong tables and happy hours, Rachel Lanham, chief customer officer at Voodle, said the most important consideration is to ensure your team fits with your company values and goals, and the only way to get there is through clear communication.
"First, you must clearly articulate the company's mission, vision, values and goals," Lanham told Business News Daily in an email. "Then, it's critical to continually and transparently communicate and reinforce this information while sharing progress (and setbacks) along the way."
When employees understand and care about your organization's direction, they are more likely to be invested in its success.
2. Create an open line of communication.
Your company needs to facilitate and encourage communication. Employees should feel comfortable asking questions, speaking up during meetings and collaborating with colleagues. They should have a clear understanding of what is expected of them and what they can expect from you. [Read related article: How to Set Clear Expectations for Your Employees]
"Have managers organize one-on-one catchups with each employee to make sure that communication channels remain open for employees to voice out problems they are facing or provide ideas," said Kevin Lee, CEO of JourneyPure. "Provide managers and employees with guidelines so that employees can discuss private issues without fear of reprisal."
3. Encourage employee feedback.
Alongside open communication, your company should foster a culture that encourages employee feedback. You can provide open and honest feedback on their performance, as well as elicit employee input on how the company could improve. You can do this through one-on-one or company-wide meetings, and internal surveys.
"Organize town halls and meetings to update employees on company strategy and plans, and invite them to provide feedback and have a discussion," said Edgar Arroyo, president of SJD Taxi. "Getting buy-in from employees can help you gain new ideas and make employees more invested in the company.
4. Build a culture of positive thinking – from the top down.
If you want a culture that is positive and encouraging, it needs to start with company leaders. Employees look to leaders to see how to act within a company, so if you lead by example, it will create an enjoyable work environment and boost company morale.
"Positive thinking really starts with the top management of a company," said Monroe Gang, CEO of Atlantic Partners. "If the CEO's mentality isn't positive, then it will trickle down throughout the rest of the tiers within the company. As a leader, it is your responsibility to remain optimistic in the face of adversity, as well as serve as a role model for everyone else in all situations – no matter how challenging or frustrating they may be."
5. Organize team-building activities.
Positive morale is closely tied to how employees feel about their team members, so it's important to host team-building activities that will bring employees closer. If your team is working in an office together, you can host team lunches and happy hours. However, organizing these types of events for remote teams can be a little more challenging. For remote teams, you could host virtual happy hours and encourage employees to have one-on-one video chat meetings.
Try to think outside the box, or ask your team to come up with activities they would like to do together. Whether you are working remotely or in the office, show your team you care by celebrating birthdays, anniversaries and other important milestones.
6. Create an employee recognition program.
Acknowledge your staff's exceptional and hard work through an employee recognition program. It can be formal or informal, but it should allow everyone in the company – from entry-level employees to C-suite executives – the opportunity to recognize others' contributions. Letting employees know that their hard work is being noticed and giving them the opportunity to acknowledge their teammates can boost morale.
"Have a recognition program where managers and other employees can nominate a person to be recognized for their achievements," Arroyo said. "Send emails to thank or recognize employees publicly for good performance. You can also organize celebrations or treat meals for completing an important project milestone."
7. Give performance-based incentives.
To boost employee morale, Lee suggested creating career opportunities for your employees by promoting internally before seeking external hires for senior positions, and by providing opportunities for employees to change teams based on their skill sets and interests.
By doing so, you will encourage employees to work hard, develop their skills and advance their careers. You should also give monetary performance-based incentives, like employee bonuses and raises, whenever you have the financial means. This will encourage hardworking employees to stick with your company instead of seeking other career opportunities with higher pay.
8. Prioritize employee mental health.
It's crucial to pay attention to your employees' mental health, especially during the pandemic, when stress and anxiety levels are very high. In a survey conducted by mental health provider Ginger, nearly 70% of employees said the COVID-19 pandemic has been the most stressful time of their careers.
As more people work remotely, it can be difficult for them to achieve a healthy work-life balance. Remote employees often have a hard time unplugging from work, which can lead to burnout. To prevent employees from becoming overwhelmed, companies should be disciplined about boundaries, Lanham said. They should also encourage their team members to take time off, even if they don't have anywhere to go.
"Demand that your team blocks time off for vacation, as well as daily time off for lunch with family or an afternoon workout," she said. "At Voodle, you get in big trouble if you are checking in while on vacation. Honoring time off is the highest-impact thing you can do for your team."
Other ways to prioritize employee mental health include offering flexible work schedules, providing additional paid time off and encouraging employees to take regular breaks throughout the workday.
9. Implement a health-and-wellness program.
In addition to mental health, your employees' physical health is imperative to business success. Many employees with office jobs have a very sedentary workday, especially if they're working remotely, so it can be helpful to implement a wellness program that gets them up and moving.
"Have a wellness program where your company organizes fitness classes or health education classes for your employees to learn more about improving their physical and mental health," Lee said. "One fun way to improve fitness levels is to give everyone a wearable tracker, like a Fitbit, and have an office competition on who has the highest number of steps."
10. Encourage employee development.
Employee satisfaction tends to drop when your staff doesn't see opportunities for professional development. Encourage your employees to take on new responsibilities, and give them time to work on passion projects or development courses.
"A strategy that is oftentimes overlooked is to offer professional development courses so that employees can either build upon their current skill set or learn new knowledge that can help to propel them into an advanced position within the company," Gang said.
Show employees a clear path for advancing within the organization. When your employees know they can grow professionally within the company, they're more likely to stay there over the long term.
Key takeaway: Boost employee morale by facilitating clear communication and feedback, recognizing and rewarding employees, encouraging employee development, and prioritizing employee health and wellness.
Importance of employee morale
Employee morale is important for multiple reasons. For one, happy employees tend to be more productive and engaged: A 2017 Gallup study showed that employees who were engaged in their work increased profitability by 21% while decreasing absenteeism by 41% and turnover by 59%.
Especially as remote work becomes more common, businesses must pay close attention to the employee experience if they want to attract and retain top talent.
"The rise of remote work means that job-switching costs are much lower for star talent," Lanham said. "Companies that ignore things like morale, culture and alignment will rapidly lose their edge, particularly in the knowledge economy."
Key takeaway: High employee morale is linked to increased employee engagement and productivity, and decreased employee absenteeism and turnover.
Effects of low company morale
Many companies have seen a downturn in operations as a result of poor morale among employees. If your business does not take steps to address the issue, you may suffer long-term problems, including:
Loss of income. The financial effects of low employee morale are staggering. According to Roberts Wesleyan College, over $350 billion annually can be traced back to low morale among employees.
Decreased productivity. If employees are unhappy, they are less likely to perform job duties to the best of their abilities. According to a study by the University of Warwick, happy employees are 12% more productive than their unhappy co-workers.
Chronic absenteeism. Employees who feel that their supervisors don't appreciate their hard work may miss more days at work.
Increased conflicts at work. When employee morale is low, disagreements among staff may be more common. Conflicts may also occur between management and employees frequently.
Higher turnover rates. Human resources costs increase if employees are unhappy working for your company. You will need to invest more money in hiring and training due to increased turnover rates.
Lack of talent retention. If your company has a poor reputation in the industry, you will have a hard time attracting quality employees.
- Poor brand image. Consumers are less likely to remain loyal to a companythat does not treat employees well.
What causes low employee morale
One or more factors can lead to low morale. To boost employee satisfaction, identify the cause of low morale. For example, is it poor communication, employee burnout or a lack of career advancement opportunities? Honestly evaluate your leadership and company culture to see where the issues originated. Here are some reasons employee morale might be low at your company:
Employees sense a lack of communication and trust.
When employees don't feel like they have open communication and feedback with their managers, it can lead to low morale. For example, maybe they feel they can't safely ask questions without being ridiculed or reprimanded, or maybe they think company goals aren't being communicated clearly. Whatever the case may be, ineffective communication and a lack of feedback can cause employees not to trust company leaders.
Employees are burned out.
Employee burnout has become all too common during the pandemic, as teams quickly transitioned to remote work and the lines of work and home life were blurred. Employee burnout can also happen at companies that place a higher importance on productivity than on employee well-being. When employees feel like their company doesn't care about their happiness, long-term professional goals or company culture, they're less likely to be satisfied.
Employees feel like their work is going unnoticed.
Similarly, low employee morale may occur when workers feel like their work isn't being recognized and there is little or no incentive to perform well.
"If there is no performance bonus and employees only receive a fixed pay, employees have no monetary incentive to do well and may seek to do as little work as possible," Arroyo said. "Employees who don't receive recognition after performing well or going the extra mile for the company can lose motivation."
Additional issues relating to low morale may include inconsistent employee treatment, favoritism, low performers and office politics. [Read related article: How to Avoid Mistreating Employees During COVID-19]
Employees are overqualified and/or have no clear career-advancement opportunities.
These two issues may be separate or intertwined. For example, if you hire an employee who is overqualified for their position, they are likely to get frustrated or bored with their work. That could ultimately cause them to quit, thereby increasing your employee turnover rate. Similarly, low morale can occur when an employee outgrows their position and feels like there are no clear career advancement or professional development opportunities within the company.
Key takeaway: Low employee morale can be caused by employee burnout, poor communication, mistrust, a lack of recognition or limited growth opportunities.