To say that the last two years have been challenging for companies of all sizes, across all industries, would be an understatement. The pandemic ushered in extreme business fluctuations, disruptions, and layoffs. All this took a toll on employees’ mental and physical health and impacted their morale.

The general climate of workplace discontent showed up in a recent Gallup survey that revealed only 36% of employees feel engaged.

Responsible employers are taking the issue of employee morale and satisfaction to heart. The recent SHRM State of the Workplace study pointed to the fact that organizations are prioritizing efforts to address employee morale and retain and recruit talent. In fact, the study revealed that 80% of employer respondents said that maintaining employee morale and engagement is a top priority.

What Is Workplace Morale?

According to Business Dictionary, workplace morale is defined as the “description of the emotions, attitude, satisfaction, and overall outlook of employees during their time in a workplace environment.” Essentially, it boils down to how your employees feel and their life satisfaction. Good morale is proven to have a direct effect on overall productivity.

Workplace morale is an issue across all industries. In this article, we’ll examine practices applied in the military and in large companies like Johnson & Johnson, and share our insights on the issue of employee morale.

Consider these statistics:

• The U.S. Army spent $287 million on wellness programs to make troops more optimistic
• Johnson & Johnson saved $250 million over the past decade due to their wellness programs

Whether companies spend millions on these programs or utilize cheaper options, these examples prove large organizations understand the necessity of employee health and happiness. Employee attitude can truly be the deciding factor between a flourishing business and lost profits, not just from a day-to-day standpoint but in the long term as well.

Why Should You Boost Employee Morale?

In simple terms, employees who have high morale levels are happy ones. It’s been proven that businesses with happy employees are more successful and profitable than their competitors.

Let’s break this down by considering some of the top benefits of positive employee morale:

1. Better Teamwork

When people enjoy their work and have a general sense of wellbeing, they’re more inclined to work collaboratively. The result? High-performing, motivated teams that execute projects on time and with excellence.

2. Lower Turnover

Another reward for building and sustaining high levels of employee morale is increased staff retention. Happy employees have few reasons to jump ship and are generally keen to remain with your organization for the long haul. Given the significant costs associated with recruiting new employees and the current unprecedented skills shortages, keeping employee turnover to a minimum simply makes business sense.

3. Less Absenteeism

When people feel unhappy, disillusioned, or simply burnt out, they may struggle to find the motivation to get up and go to work. It is well-accepted that excessive levels of stress can manifest in unwelcome physical symptoms. These can lead to people calling in sick more frequently. When certain employees are regularly absent, it can negatively impact the entire team’s morale as others may be required to pick up the slack on short notice.

4. Fewer Errors

Employees who have low morale levels often take less care in doing their work and have lower attention to detail. This might manifest in the form of more mistakes and errors or sub-optimal levels of customer service.

5. More Creativity

Nobody feels inspired to develop bold, innovative ideas when they’re frustrated or experiencing negative emotions. In contrast, when people are relaxed and in a good mental space, they’re more inclined to be innovative and suggest new ways to tackle old problems.

6. Productivity Gains

Did you know that economists have found that workplace happiness leads to a 12% spike in productivity, while unhappy workers proved 10% less productive? According to the research team running this particular study, “Human happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings.”

How Do you Analyze Employee Morale?

There are several qualitative and quantitative ways to gauge the levels of employee morale within your organization. First, let’s look at some qualitative indicators:

• Poor, hostile, or strained communication among colleagues, teams, and management
• Excessive levels of absenteeism and tardiness
• Sub-optimal quality of work
• High staff turnover
• Lack of commitment and enthusiasm

You can also use a more structured and data-driven approach to measuring and analyzing your internal morale. This might include one-on-one interviews with employees, conducting an employee survey, or monitoring attendance, performance, and turnover rates.

What Factors Can Harm Employee Morale?

1. Lack of Training and Development Opportunities

Most people have an inherent desire to do better and improve themselves. If ambitious and motivated employees feel that there are no opportunities for growth and advancement within the organization, it’s understandable that this will affect their morale. Regular and appropriate training is important as it will ensure the people feel confident in completing their tasks to the required standard. It will also reduce the chances of misunderstandings, tension, and interpersonal conflict.

2. Leadership Issues

Poor leadership is one of the most common reasons for low morale within an organization. Whether it’s micromanagement, autocracy, intimidation, or sub-optimal communication, ineffective leadership will surely impact company culture and result in a dip in morale. Leaders need to understand how their words and actions affect their team.

3. Problems with the Company

In every business, there will be times when it’s not all plain sailing. Perhaps this year’s financial results were disappointing, or maybe the company lost one of its biggest clients. Sometimes events like a merger can introduce feelings of fear and uncertainty within the employee base. During such times, it’s vital to be transparent with your people about what’s not going right and what you’re doing to address it.

4. Poor Communication

Don’t shut your people out and try to lead from an ivory tower. If your employees aren’t clear about what you expect of them or don’t understand what’s going on in the organization, they’ll likely feel worried, undervalued, irrelevant, or even resentful. These feelings create a breeding ground for poor morale within an organization.

Studies on Workplace Morale Tell All

Going back to the military, we can learn quite a few things about the importance of morale within organizations. When soldiers were surveyed (Brookings), it was found that 52% of soldiers scored low on questions that measured optimism, and 48% reported low satisfaction with their job.

Why was morale so low? The speculations vary, and all likely play a part:

• Military Times polling data shows only 27% of troops believe their senior leadership has their “best interest at heart,” pointing towards a disconnect between leadership and troops, naturally lowering morale.
• A study conducted by the Center for Army Leadership reported that only 26% of Active Component leaders believed the Army was headed in “the right direction,” showing a lack of faith, purpose, and trust.

In addition to speculation, those that felt underpaid, under-equipped and under-appreciated” due to benefit cuts experienced devastated morale.

Let’s look at other studies geared towards traditional workplaces:

• The University of Warwick conducted a study on 700+ participants, which concluded happiness led to a 12% spike in productivity. (Mentioned, Google even rose employee satisfaction by 37% by investing in employee support initiatives and various benefits.)
• According to Ben Waber’s research, companies can increase productivity by up to 25% by making small changes such as overlapping lunch breaks and moving coffee stations.

Ways to Boost Employee Morale

Now that we’ve established why employee morale is important, let’s consider some tactics to build it:

Define Your Company Culture

A strong workplace culture can be your most powerful asset, setting the context for everything you do. Everyone in your business should understand and embody your company’s culture. So, define it clearly, communicate it iteratively, and reference it often.

Maintain a Calm, Healthy, and Organized Business

Few people feel energized or motivated by operating in a tense, chaotic environment. Sustained exposure to toxic workplace environments can lead to burnout, stress, and even depression – none of which are a recipe for high morale or employee engagement.

Be an Open and Honest Leader

We touched on the importance of transparent and authentic leadership earlier. It’s incumbent on every leader to lead by example in terms of how they speak and behave in the workplace. So, always hold yourself to the same ethical standards and rules you expect others to respect and uphold. Be the person others look up to and admire, not the one they fear, resent, or distrust.

Use the Proper Tools

Most people are accustomed to using modern, digital tools in their personal lives – so why should they expect their workplace to be any different? If you’re still expecting your people to use antiquated tools to perform their tasks that a software program could make short work of, like manually inputting data in a stockroom or updating payroll, you’re inviting boredom, frustration, and low levels of productivity. Modernize and digitize processes and workflows when possible.

Recognize People

Saying “thank you” and recognizing people for a job well done doesn’t take much time or money, but it’s one of the most effective ways to build positive employee morale. And recognition doesn’t only need to be work-related. Send out company updates to celebrate personal milestones such as a birthday, an anniversary, or a child’s graduation from college.

Invite Employee Feedback

If people feel unhappy or frustrated about something but don’t feel they have a safe forum to share their views and concerns, it can lead to low levels of motivation and, ultimately, morale. You can give your people a “voice in the room” by conducting regular, anonymous employee surveys or snap feedback polls. Create employee feedback channels that allow your staff to answer workplace surveys online, from anywhere, even if they don’t have a company PC. Also, ensure that leaders and managers adopt an open-door policy, so their people feel comfortable sharing informal, ad hoc feedback.

Communicate, Communicate, Communicate

The importance of open lines of communication in a business should never be underestimated. Your internal communication should be relevant, frequent, and happen bi-directionally and cross-functionally within the company. When people feel that they matter, they’ll be more loyal and engaged, resulting in increased morale.

Set Boundaries

Everyone in your business should be treated with respect and never subjected to any form of bias or discrimination. It follows that building and sustaining high levels of employee morale requires being explicit about what constitutes unacceptable behavior. Be intentional about enforcing these norms, vigilant for any signs of non-compliance, and swift to call out individuals or teams who act contrary to it.

The kinds of behavior that should never be allowed or tolerated include:

• Racial, age, or gender-based discrimination
• Bullying
• Gossiping
• Dishonesty
• Foul or disrespectful language

Invest in Employee Wellness and Benefits

Employee wellness – which spans both people’s physical and mental health – shouldn’t be considered an afterthought when it comes to employee engagement and morale. Are you offering benefits to improve your employees’ health? Their financial wellness? Their overall peace of mind? A good place to start is offering health insurance and a financial wellness program.

Your financial wellness program should most importantly include Earned Wage Access (EWA) to reduce the need to use predatory cash advance services between paychecks. When financial stress is reduced, employees are motivated and focused on their work and growth.

Embrace Diversity

In diverse workplaces, the organization embraces people from all backgrounds, walks of life, race, gender, age, socio-economic status, and sexual orientation. And these are precisely the places where job seekers want to work. The findings of recent research by Glassdoor underscore this fact:

• Over 3 out of 4 job seekers and employees (76%) say a diverse workforce is an important factor when evaluating companies and job offers.
• Almost a third of employees and job seekers (32%) wouldn’t apply to a job at a company where diversity is lacking within the workforce.

Be Flexible

Over the last two years, more white-collar organizations have seen the wisdom in offering their employees more flexible working arrangements, and remote and “work-from-home” arrangements are now an established norm. But remember, flexibility is valued by all employees, not just those who are office-based.

Why not give hourly workers and staff who work shifts the ability to swap shifts quickly and easily? This needn’t create an administrative headache. It’s entirely possible to give your employees access to your shift management system using their smartphone, where they can view their shift schedule and see who they might be able to swap with.

Be Attentive and Listen

Nobody likes to feel peripheral or that they’re nothing more than a distraction. If you’re a manager, constantly checking your phone or emails while you’re in team meetings or one-to-one catchups is disrespectful. Give your people your undivided attention when speaking with them and practice active listening.

Learn from Those Who Leave

When people decide to move on, they may do so for many reasons. Some retire or decide they want to further their education. Others want or need to relocate. But there will be times when people decide to take up an opportunity in another company. Whatever their reasons for leaving, exiting employees are an excellent source of learning for every business. So, always make sure you conduct exit interviews with departing employees.

If there are areas where you could improve, you should act on this information to ensure you minimize the chances of losing more good employees for the wrong reasons.

Have Fun

Of course, every leader needs to make it clear that their company is a place where hard work is expected. But building morale and a positive workplace atmosphere also mean setting time aside for a little relaxation and fun. So, schedule informal social events and team-building activities that give your employees a chance to connect more deeply on a personal level.

How Payactiv Helps to Boost Employee Morale

The quality of your employees’ staff morale can make or break your business, and leaders are responsible for taking it seriously.

Payactiv is in the business of helping companies like yours initiate programs that foster greater levels of employee happiness, engagement, and overall morale. We’re the partner of choice for businesses seeking to help their people participate fully in both work and life.

Employers who offer Payactiv’s EWA and financial services as employee benefits are reaping these results. They’ve noticed a significant drop in turnover amongst employees who use Payactiv, versus those who don’t. The average employee net promoter score amongst Payactiv users is 84, which means more than 8 out of 10 employees responded that they would recommend their place of work to others.

EWA allows employees to quickly access the money they’ve already earned before payday. It can happen in several ways. The funds can be loaded onto a debit or prepaid card, transferred to their bank account, or even picked up as cash at Walmart. Alternatively, PayActiv allows employees to use their earned wages to pay for services like Uber and Amazon, and pay their bills directly in the app.

With Payactiv, you can give your employees choices about how to access their money. Our instant deposit feature lets them access their earned wages in real-time in case of emergencies. We also offer additional perks like discounts and special offers and handy features like budgeting and savings tools and free bill management.

Keen to boost employee morale in your business? Learn more about Payactiv’s Service, or book your demo now.