Employee Morale Improves Company Culture

Sep 4, 2015

Employee turnover is a serious business problem. A conscientious, productive staff is an important resource in any organization. How can you boost employee morale and improve company culture that will help you retain valuable employees? Consider the fact that you are the boss in the following situation.

Your boss has been awaiting your arrival to his office for your private meeting. You’ve been dreading this moment all morning. The walk down the hallway to the row of elevators seems to take forever. You can hear the rumble of cars through the elevator shaft as it travels downward to the next floor. The doors open and you enter. Your finger trembles slightly as you press the button for the penthouse suite. The familiar ping that announces the arrival at your designated floor rings in your ear, seeming louder than usual.

You square your shoulders and approach the reception desk that guards the entrance to the office of the company president. The receptionist gives you a half-hearted smile and say, “He will see you now.” You hesitate at the door and take a deep breath then release it. You feel the tension in your shoulders ease. “Here I go,” you think. “I hope he will listen to my concerns. This is a good position. I would hate to leave here. Am I the only who is dissatisfied?”

You knock on the door and wait, wondering if your concerns matter…

Why is employee morale important?

Simply put, employee turnover costs your company money, productivity and in some cases, customers. Disgruntled employees create a negative work environment that fosters, you guessed it, other disgruntled employees.

Statistics on the cost of replacing an employee vary. According to an article by Suzanne Lucas of CBS’s Money Watch, the highest rate of turnover occurs in the lowest paying jobs. If a person makes $30,000/year, the replacement cost for him/her would be 16% of the annual income or $4800. The cost goes up as the income rises. Replacing a high paid executive can cost up to 213% of the annual salary involved (How Much Does It Cost To Lose Employees? Nov. 21, 2012).

According to Forbes magazine, employee turnover rates under 15% fall within the acceptable range. If your company’s rate is higher, consider taking steps to improve employee morale and enhance your company culture.

Money still talks…

Evaluate your pay scale. Does it reflect the impact your employees have on company profits? A knowledgeable, responsible staff member is a valuable asset. If you cannot retain employees, you might not be able to please stockholders. Hard work and dedication should be adequately compensated for. Pay good employees what they are worth, not the lowest amount you hope they’ll accept. Job satisfaction is not only about money. Providing a strong benefit package can improve employee morale.

  • Healthcare insurance is of vital importance to employees with families. For those in lower waged positions, it exceeds even pay scale as a factor in job satisfaction. Providing insurance for employees can help boost morale and improve your employee retention rate. Health care programs enable employees to take preventative measures to stave off illness and reduce absenteeism.

  • Paid sick leave is a valued benefit to your staff. Most people get sick occasionally, and it is hard to concentrate at work when you don’t feel well. If people come to work ill, they can pass their germs to others. Sick leave is an asset for the employee because he/she won’t suffer a monetary loss when taking a necessary sick day. The company benefits because the threat of spreading illness in the workplace is lessened.

  • Stock options reward employee loyalty and excellent job performance. When employees own stock in the company it makes them realize why productivity and customer satisfaction are vital objectives. It helps employees feel responsibility for themselves and the well being of the organization, thus improving employee morale.

  • Bonuses show your appreciation when employees meet and exceed your expectations. They provide an incentive to continue high achievement.


Some employees leave because they feel they cannot move up within the organization. Advancement is not just about earning capacity. It is about having more responsibility, decision making power and a chance to make a difference. Bypassing in-house promotion in favor of outside hires sends a signal to employees that their chances of advancement are limited. Promotion from within, where possible, is another good tool for improving employee morale.

Employee review is important. It gives you an opportunity to give praise for good performance. Even high achieving people appreciate a well-deserved pat on the back. Periodic reviews help identify problem areas in an employee’s performance. Concentrate on solutions that will best benefit the employee such as more training or new skill development. If education is required, tuition reimbursement also has positive effects on boosting employee morale.

Components of a Good Workplace Culture

Rules and work standards are necessary components in any business. Be sure employees know what is expected of them. Regulations not enforced in an open and fair manner are problems waiting to happen. Most people want to adhere to the rules, as long as they apply to everyone. Seek feedback on policies and problems.

  • Foster a culture of mutual respect. Acknowledge the worth of each individual. Have zero tolerance for discrimination and expect the same from your employees.

  • Accept people’s individuality; it is the wellspring of innovation. The “different” are often the most creative. Have periodic brainstorming sessions and encourage new approaches to solve problems.

  • Help employees live up to their potential, believe in their worth, take on more responsibilities, and to try new things.

  • Show employees you trust them. Encourage them to ask questions and think for themselves. Let them make their own decisions in the scope of their responsibilities.

  • Fun is a powerful motivator. Where anger and mistrust divide, laughter unites and boosts employee morale. Humor can often diffuse conflict, resentment and stress. Arrange company parties and other activities.

  • Help your employees connect with your company culture. Show them it is not just about profit margin. It is about objectives and goals. Help your staff see your vision. Help them feel and embrace the concept of what you want the company to become.

…As CEO, you scan the notes you’ve jotted down after examining the personnel file.

“Employed here six years. Excellent reviews. Hard worker. Willing to accept more responsibility. Seems dissatisfied of late. Low employee morale.”

You hear a knock on the door and stand, ready to greet your employee with a smile. “Come in please,” you say.

How will the conversation unfold?

This quote sums up how to boost employee morale very nicely.

If you want to build a ship, don’t herd people together to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” – Antoine de Saint Exupery

About the Author

Charlie Kimmel

As President and CEO, Charlie has dedicated his 25+ year career to executive search at Kimmel & Associates. Charlie began his career at Kimmel & Associates in 1990 as a Recruiter. In 1993, he graduated with honors from the University of North Carolina at Asheville, where he received a BA in History.

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