How to Keep Morale Up in a Down Economy

December 7, 2009: MSN Business on Main

by Toddi Gunther

Speak to employees at companies where cost-cutting and layoffs continue and it'll be clear that any talk of the recession being over isn't having much of an impact on workplace morale.

But while it might seem challenging to keep employees in this position focused, motivated and productive, it's essential for companies to engage them and inspire them to do their best. This isn't just talk, either, as studies have shown that high employee engagement correlates with strong business results like better performance, improved job retention, increased job satisfaction and organizational loyalty, and reduced stress.

"The willingness to go the extra mile, motivation to perform to the highest standards, creative energy applied to work, and interest in the company's success … is the secret sauce of successful companies," says Marcia G. Rhodes, spokeswoman for WorldatWork, a global association of human resources experts.

Ken Thomas, author of "Intrinsic Motivation at Work: What Really Drives Employee Engagement" and co-author of a measure of employee engagement used for management training and organizational change called the Work Engagement Profile, agrees: "It is a win-win [because] organizations need their workers to be engaged, but workers also want their work to be engaging."

Thomas notes that because today's work is more likely to be in the service sector rather than the manufacturing sector, more judgment and creativity are required from employees. "In this environment, then, good work isn't just about complying with routines and rules," he says. "It requires a deeper level of commitment and psychological involvement — a different degree of motivation."

To that end, small-business owners actually have an advantage over large corporations when it comes to keeping workers engaged. That's because "employees in small companies are much closer to the results of their work," says Cindy Ventrice, a workplace consultant and author of "Make Their Day! Employee Recognition That Works." And when employees can see the value of the work they do and make the connection between their job and the greater good of the organization, they are much more likely to be engaged.

So, in light of all the benefits of employee engagement, what exactly can small-business owners do to keep their employees loyal and productive? Don Lowman, managing director of strategic growth for human resources services at Towers Perrin, a global professional services firm, advises companies to do five things well for employees: know them, grow them, inspire them, involve them and reward them.

With that framework in mind, here are a few simple strategies that companies can use to initiate and/or improve employee engagement:

Spend time. Business owners need to spend time with their employees, answer their questions, and continually reinforce each employee's value to the company, says Rhodes of WorldatWork. "Money pays the bills but it doesn't engage the spirit, inspire enthusiasm or drive innovation," she says.

Implement recognition programs. Increasing the amount of recognition employees receive often increases engagement, says Ventrice. One strategy she recommends is to start a recognition notebook. A manager writes a note of praise or appreciation for an employee and then either passes it along to someone to do the same or leaves it somewhere for another person to write in. "It becomes a traveling trophy of positive comments and a permanent reminder of all the accomplishments," says Ventrice. Another strategy: Give away gift cards of small denominations for a job well done and then ask the recipient to name two or three others who helped to get the job done and give them gift cards, too.

Provide meaningful feedback. Communication, says Rhodes, even if negative, is what employees crave. According to a new Leadership IQ study, 66 percent of employees believe they have too little interaction with their boss. The study also shows that 53 percent of employees say that when their boss does praise excellent performance, the feedback does not provide enough useful information to help them repeat it.

While keeping employees engaged is hard work, the upside is that your employees will work much harder because of it.


Toddi is an award-winning journalist, writer and editor and currently is a contributing writer covering career management issues for The Wall Street Journal.