Why Morale and Engagement Are So Important
Posted: 04/01/2010 12:00:00 AM EDT | 10
If there is one word that encapsulates the benefits that accrue from a high morale organization, it is this: performance. This refers to performance at the individual level and that of the organization as a whole. Evidence for morale correlating highly with, and driving, performance is strong and growing.
If you have competition such as most organizations in the private sector (although increasingly public sector organizations have competition), then high morale will increase your competitiveness. If you serve customers, your customers will be more satisfied when served by high morale employees; those customers will also be more likely to return to you. If profits are your goal, you will increase the likelihood of these. If you have a publicly traded stock, even your earnings per share can correlate strongly with your morale level. If you are in the public sector and have a mission, like in the military or law enforcement, you will be much better at fulfilling that mission; indeed many in the military say that without good morale, missions become much more difficult or even impossible to achieve.
At the individual level, the high morale employee will experience less stress than the low morale one and as a result, less absenteeism and sick days; the high morale employee will be more engaged, willing to work harder, be more committed to the organization’s goals than the low morale one, and certainly be a stronger advocate for the organization with others such as customers, family and friends or potential employees.
Combining morale with organizational performance is one of the central focuses of the morale field of study, since consultants in this area are so often faced with the “so what?” question, such as:
“I like the general idea of high morale and it sounds like a good thing, but what does it really do for me?”
An alternative and more negative view is often:
“I’m in business to compete and make a profit; this stuff is a waste of time and won’t change a thing.”
Against this background, to counter these still widely held views and demonstrate just how powerful morale is, we will summarize many of the performance and effectiveness benefits of the high morale organization here. Everything you will read on this topic is backed by solid data, in nearly all cases from multiple sources.
Morale Provides a Competitive Edge in Good Times and Bad
Surviving a crisis (for the organization alone or for the society in general) is far easier when morale is high. The team pulls together and works as one. Sacrifices are shared much more easily. High morale is therefore more than protective armor, although it does play that defensive role: it offers an offensive path through the crisis, which those lacking it will not be able to follow.
High Morale Supports the Implementation of Organizational Strategies
It’s not your plans that are important; it’s whether you can implement them. A good strategy is a fine thing, but it is useless unless you can make it happen. Making it happen depends to a large degree on your people, and therein lies the power of morale.
The Morale Process (Measurement-Implementation) Gives Employees a Voice
It sounds like a circular argument, but it is true: Simply measuring morale and feeding back the results, when carried out correctly, improves morale. Over and over again, employees have thanked us for being in their organization, collecting their opinions and letting them know how they and their colleagues feel as a group.
High Morale Helps Organizations Attract and Retain Talented People
Organizations selected by Fortune and the UK equivalent Sunday Times Best Places to Work, trumpet their appearance on such lists in recruitment advertising, not just at the point of sale like at Starbucks, but also in newspaper and online ads. They are eager to let the world know how good it is to work for them.
High Morale Makes the Workplace Easier to Manage and Increases Productivity
Stripped of the dramas created by negative morale situations and the challenges of dealing with people who like to perpetuate them (from individuals with no management responsibility to managers themselves), the high morale workplace becomes less fearful, stressful and more “fun.” Management time can be focused on things that make the organization more productive, not just “putting out fires” related to personnel, or replacing the people who have left.
High Morale Reduces Workplace Accidents, Reduces Absenteeism, Reduces Workplace Stress, Improves Employee Health and Reduces Sick Days Taken
Plenty of evidence exists for all of these claims; in fact the evidence is so overwhelming that it is hard to imagine why organizations do not implement practices that would lead to a maximum level of morale, even if only to gain just these advantages; and yet many do not.
High Morale Organizations in the For-Profit World Have Better Financial Performance than Low Morale Ones
There is strong evidence from multiple and highly credible sources that morale is positively correlated with higher stock prices, higher earnings per share, and even five year survival following an IPO.
High Morale Organizations Can Have Higher Customer Satisfaction than Low Morale Ones
A great deal of research shows the morale-customer satisfaction connection, and demonstrates causal connections between the two.
Morale is a Leading Indicator and Allows Organizations to Prevent Potential Negative Situations
By examining trends based on previous employee survey data you have collected, you can have a sense of how the future will play out if you take no action. This is especially true when a poorly performing manager is having a negative effect on employee morale.
The Morale Process Is One of the Most Democratic Activities in Which an Organization Can Participate
There is nothing quite like giving every single person who works in an organization the chance to say exactly what they feel, knowing that top management will look at every piece of data and every written word.
High Morale at the Individual Level Is Connected To Job Performance by That Person, and Is As Good a Predictor of That Performance as Other, Well Tested Measures
Multiple studies now demonstrate that there are few activities one can undertake better than knowing a person’s individual level of morale, in order to predict how they will perform on the job.
Faced with the overwhelming evidence for the power of morale and its effect on organizational performance, some put forward the idea that the relationship is actually reversed, i.e. performance drives morale. While there is a “loop” effect, in that a customer’s positive feedback about a company’s product or service to a sales representative can boost that individual’s morale, for example, the evidence supports a much stronger effect in the other direction, from morale to performance.
Recent data from Gallup show that the US workforce is only 29 percent “engaged” at work, and the Conference Board states that US job satisfaction has been falling for two decades. Europe is, if anything, even lower. With the US and Europe facing ever more intense competitive pressures from high workforce morale countries like India, China and Brazil, they cannot afford to fall behind; it is in their interest to do all that they can to enhance the morale aspect of work life. If they do this, the morale and engagement of their people will be one of their key competitive edges in an increasingly global marketplace.
Excerpted from Employee Morale: Driving Performance in Challenging Times by David Bowles and Cary Cooper. Copyright © 2009 by the authors and reprinted by permission of Palgrave Macmillan, a division of Macmillan Publishers Limited. All rights reserved.
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This is a great article that shows through research what has intuitive for many of us. As you mention, I have heard the viewpoint that rather than morale driving organizational performance it is actually performance driving morale. This has left some to conclude that rather than focusing on improving morale, the organization should focus more on being successful because it is this success that will enhance morale. But this mindset discounts the importance of people to making a company successful! I am glad you point out that the research supports a much stronger link the other way.
Peter and Derek, thanks for the input and data! Peter I think you and I are on the same page as far as morale being naturally high in ("many but not all!) people. Hiring the right people is so critical here. But I understand what you are saying and that management's job is to remove obstacles to high morale rather than "build" something which is already there. Its a profound point, certainly a philosophy of people which more managers need to have.
best to you both, David
CCARD, thank you for your comments. I would recommend two things for you. Of course I am a bit biased but my book is a good start if you like this excerpt and the style works for you. The book is heavily performance oriented, which you might find very useful as background. Such information is essential to convince people in the organization as to why morale is so critically important (as summarized in this article). It also has a lot of information about measurement, myths of morale, mistakes you can (easily) make, and many other things related to what you are wanting to do. I also highly recommend a book entitled "The Enthusiastic Employee" by David Sirota and colleagues. You can find it on deep discount because it has been out for a while. It is from a very reputable source and like my book has a lot of references to take you elsewhere. Google books will give you a peek into it, chapter headings etc. for you to see if it works for you.
One final point, if you are embarking on this for the first time in your organization, you need a human guide, a good consultant who knows what they are doing and has background and extensive experience in the field. Even those who have been working with morale for some time get help to fine tune and improve the power of what they are doing, etc. Good luck and let me know if you want more info. You can reach me through my blog/website.
I am very interested in the observations and points put forth in this article.
Can you provide some definitive information on how to develop and implement a process for improving morale in the organization; i.e., reference materials, resources.
This is a great set of observations for anyone who is in doubt about the value of morale in any organisation.
The next step is to figure out what to do on Monday morning to restore the morale that has disappeared.
For the most part human beings are naturally in a state of high morale.
When they start work in a new job their morale is sky high, but it does not take long for it to sink.
Finding out how to increase morale is a red herring because it is naturally high.
What we should be looking for are the things that depress the morale of the workforce.
If we simply stop doing these things to the workforce their morale will be as high as anybody needs.
Peter A Hunter
Very interesting article. We found similar results in our own research:
In a survey of HR professionals and employees conducted by Globoforce, we found the recession and resulting actions by companies are negatively impacting employee morale:
* 70% of employees indicated that layoffs and the reduction or elimination of programs and benefits will have a negative short- or long-term impact on morale
* 55% of employees said these cuts will impact their productivity levels now and in the future.
* 89% of HR managers agreed that employee morale is being impacted
* 80% of HR managers said productivity will take a hit in the short or long-term.
But, surprisingly, employees still feel good will toward their employers:
* 45% of employees indicated these cuts have had ‘very little or no impact on their goodwill’
* Only 3% were ‘holding out until I can find another job.’
More on the research and a link to download are available here: http://bit.ly/dkppY8
Thanks all for the great comments! Eagle I think its pretty interesting that many managers these days think that morale is "soft", but the military does not. Isn't it a bit ironic that the toughest profession in the world places morale at the highest prioirty, and some people who think they are so tough, working in an office somewhere, bad mouth it as "touch-feely" stuff? One of my goals with the book was to try and bring this to light, and move people away from this "soft" attitude of morale by demonstrating the huge performance benefits which it has.
Going back thousands of years, morale has been a key factor in military history. Instinctively, we know that it matters. I am curious, however in knowing how a high-morale company defined statistically. The actual metrics would be interesting.
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