What is employee morale?

The idea of morale is complex because, as psychologist Robert M Guion explained as far back as the 1950s, it belongs to individuals but stems from broader culture and experience – the 'total job situation,' as Guion puts it.

He defines morale as "the extent to which an individual's needs are satisfied and the extent to which the individual perceives that satisfaction as stemming from his total job situation.1

The concept is both personal and part of something much bigger. When trying to pin down the nature of morale, most definitions mention satisfaction or the idea that the workplace should meet a set of basic needs. The psychological approach tells us that it's a state of mind, something that one study called "a mental condition or attitude of individuals and groups which determines their willingness to cooperate.2

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The more you focus on what employee morale means, the more you can see that it's not something that exists in isolation but overlaps with several other issues:

  • Workplace culture – the source of high or low employee morale
  • Employee engagement – happy individuals contribute to high employee morale
  • Employee experience – an individual’s experiences at a company, how being at work feels to them, is a crucial component of morale
Employee moraleimage

Employee morale and workplace culture are closely linked

Why is employee morale important?

Why is employee morale important?

High morale can give your organization an edge, while morale that's in the doldrums can drag it down. Here are just some of the areas where morale levels can have a significant impact.

Employee engagement

Morale isn’t the same as employee engagement – a person’s sense of connection and commitment to the organization – but it’s a crucial component. If morale is low, employees are less likely to be invested or engaged in their work. And if an employee is actively disengaged – ‘acting out’ their unhappiness, as Gallup3 - puts it – they can seriously undermine morale.

Productivity

When morale is high, people enjoy doing their work. That means they’ll do it more efficiently and even put in more discretionary effort by going the extra mile to get things right. But when morale is low, productivity can fall.

Whether it’s taking on tasks with less enthusiasm or calling in sick because they feel so unhappy, employees’ lack of satisfaction can seriously impact everyday tasks and big projects. And it costs money in more ways than lost output: According to Forbes, paid sick leave costs employers $160 billion dollars a year.

Retaining talent

It makes sense that people who feel happy and fulfilled at work will want to stay with an organization. That means companies can keep knowledge, experience and expertise within their business. It also means that they save on the costs of finding new talent, which can be more than you think once recruitment and training costs are taken into account.

Customer experience

“Happy staff means happy customers” may sound like a cliché, but research suggests it’s true. When Harvard Business Review looked at Glassdoor employee reviews alongside ratings from the American Customer Satisfaction Index (ACSI), they found that getting a better rating on Glassdoor corresponds to a boost in customer satisfaction scores.

On the other hand, when your staff are unhappy it’s only a matter of time before your customers and clients pick up on their ‘bad vibes’. What you could dismiss as a bad day in the office for one of your team may cost your business dearly. According to PricewaterhouseCoopers (PwC), 32% of worldwide consumers will walk away from a brand they love after just one bad experience. That figure jumps to 49% in Latin America.

Team collaboration

When team and individual morale is high, people can collaborate well together, feeling confident that they’ll be listened to and able to get their points across. And good team collaboration – having clear responsibilities, trusting others to do good work, everyone sharing a common goal – will help build morale, creating a virtuous circle. On the other hand, low team morale is one of the most significant obstacles stopping teams from collaborating effectively.

Employee morale image

Employee morale can boost team collaboration productivity

What affects employee morale?

What affects employee morale?

While morale is something people feel - individually and collectively - many elements of the working environment can affect it. Here are 8 of them.

  • Leadership

    The best leaders help to build morale in their teams from the top-down, inspiring them to do their best work and showing, by example, the positive behaviors they want from people in their organization. Poor leaders, however, can leave their staff feeling unmotivated or disengaged. They can do this by showing a lack of trust in their employees through micro-managing or failing to value team members.

  • Work/life balance

    Encouraging a healthy work/life balance is crucial to boosting morale. If team members feel that their work negatively impacts their personal lives, they're bound to feel unhappy. Leaders have to be especially aware of this with remote and hybrid working, as it's easy for the boundaries between work and home life to become blurred.

  • Reward and recognition

    Celebrating your employees’ achievements helps them to feel valued and encourages them to do more of the same. Whether it’s simply praising a team member in a group chat or rewarding them with gifts or vouchers, the small gestures can make a world of difference to someone’s attitude.

    Rewards really don’t have to be anything huge: 75% of employees said their motivation and morale would improve if managers just said ‘thank you’ more often, according to a study by Reward Gateway.

  • Communication

    Having the right communications tools and processes is essential, but communication must be genuinely two-way to maintain morale. Team members can be brought into conversations at the right time and using the right software, but employees will soon feel disenfranchised if they don't feel their managers and co-workers are acting on their advice.

  • Change

    When managed properly, change has the power to boost people’s motivation. A new piece of software or an improved office space could inject some much-needed enthusiasm into a team. On the other hand, change can unsettle people – during the switch to remote working, 65% of employers said maintaining morale was a problem.4

    And a leadership change, for example, could hit a team’s confidence, maybe causing them to feel uncertain about their future in the company. This is why transparency and communication are vital in times of change.

  • Training

    Effective training can empower your staff to take on tasks with confidence. On the other hand, if organizations give people inadequate training, they can become frustrated. Promotion opportunities - or the lack of them - will also impact morale, so signposting clear career paths is crucial.

  • Safety at work

    Improving health and safety at work isn’t just a moral obligation for employers – it will also make it much easier for staff to do their jobs, reducing absence and helping to give productivity a boost.

  • The nature of work

    A company’s everyday work is the soul of a business and one of the most important aspects of team morale. If tasks feel monotonous or unfulfilling, it won’t be long before employees’ job satisfaction is affected. People want to feel challenged by their work without being subject to high levels of stress.

Employee morale image 2

Reward and recognition is a key factor in employee morale

What are the signs of low morale in the workplace?

What are the signs of low morale in the workplace?

There are a few things that could indicate your organization has a morale problem. Here are the warning signs to watch out for.

High staff turnover

Staff leave businesses with low morale more often than they leave businesses with high morale. So if you notice that team members are moving on more frequently than usual, it could be a sign of a company-wide problem.

You can work out the employee retention rate by dividing the number of employees on the last day of a given period – a year, say – by the number of employees on the first day. If you multiply the number by 100, you’ll get a percentage.

Absence

You can also assess employee morale by looking at a team's absence rate. When staff aren't satisfied at work, they're more likely to call in sick or, in worse cases, fall ill because of mental health issues. A study in the UK found that absenteeism affects the profitability of 70% of small to medium-sized businesses.5

Negative attitudes

When a colleague or a group of colleagues show signs of negativity, low morale could be the cause. Team members might show less initiative or criticize other people’s ideas unfairly. If these attitudes go unchecked, progress with everyday tasks and finding solutions to bigger problems may be affected – and morale could get even lower.

Conflict

Nothing says that a team is unhappy like conflicts between colleagues. If people can’t resolve their differences reasonably, it’s a sign that something is wrong.

Misinformation

Workplaces where rumors are rife usually suffer from low team morale. If misinformation is common, it usually means that somebody isn’t doing a good job of communicating. Sometimes sharing bad news or admitting your shortfalls is more reassuring than leaving things unsaid and leaving gossip to fill the gap instead.

Poor performance

If people miss deadlines or make more mistakes, it could be a sign that morale is low. The problem may arise from excessive workloads, changing priorities, or a combination of different causes. It's essential to take full responsibility when things go wrong and ask why before starting to put them right.

How can business leaders boost employee morale and company culture?

How to boost morale: 5 top tips

How to boost morale: 5 top tips

So how do you boost employee morale? Follow these tips to improve morale at your company:

  1. Monitor morale

    Gauge attitudes by asking your staff to fill out employee experience surveys. These can give you a better idea about how people are feeling about their jobs. Make sure the results remain anonymous so that everyone feels they can answer honestly.

    When you receive responses, it's important to make an action plan to address areas for improvement. That way, you can reassure staff that you take their wellbeing seriously. To build a genuinely transparent culture, you should share the results with your team and involve them when deciding your next steps.

  2. Improve communication

    Communicating clearly and often can help to build a sense of trust, especially in hybrid teams where employees may feel far away from the action. Explore solutions with video communication and all the tools you need to share ideas simply and effectively.

    Try to create policies so that everyone understands who to contact and when with different queries. That way, everyone you include in a task can make a worthwhile contribution. To really ramp up morale and build trust, you should encourage regular feedback from across the team. Giving people the chance to voice their opinion will help to make them feel valued.

  3. Celebrate team accomplishments

    Organizations that understand the importance of recognizing employee achievement often have high team morale. By celebrating the little and bigger wins, managers give their employees approval for their work. This usually makes people more enthusiastic when taking on a similar job and gives them a renewed sense of purpose.

  4. Prioritize wellness

    Everyone wants to work for a company that values their wellbeing – and showing it's important to your organization may be simpler than you might think. Providing employees with the tools they need to work flexibly as part of a hybrid team could help them better manage their work/life balance.

    Other initiatives can help too. Like dedicated email and meeting-free times so people can work without distractions, or encouraging teams to take lunch breaks and finish their day at a reasonable hour. There are plenty of wellness programs dedicated to teaching businesses and their staff about the small changes needed to make life better and boost team morale in the process.

  5. Make time for team building

    Staff away-days and team socials with everyone in the same physical space have been off the agenda during the pandemic, but taking them online can have big benefits. And with restrictions loosening, making time to bond outside of the usual work environment can be a significant morale booster.

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