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Improving Employee Morale: The Importance of Relationships in the Workplace

Gwen Knight

Southern Utah University

Professor David McGuireHuman Resource ManagementPADM 6500-701

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Abstract

The correlation between employee morale and productivity motivates organizations to

develop strategies and incentives to boost morale. The recession of 2008 has affected employee

engagement. It has been suggested that incentives and rewards be used to boost morale and

reengage employees; however, there are some indications that these strategies are not always

effective. A close relationship between a supervisor and employee is identified as having the

greatest impact on morale in the workplace. The responsibility for developing these relationships

rests upon the supervisor who must be trained and motivated to engage with employees. If these

relationships are successfully created, both morale and productivity will increase.

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A great deal of literature exists addressing employee morale. The general consensus of

this literature is that there is a strong correlation between morale and productivity. This

correlation motivates organizations to develop strategies and incentives to improve morale in an

effort to improve productivity. What strategies or incentives have the greatest impact on morale

in the workplace? The answer to this question may provide valuable insight to managers in

organizations as they work towards developing a productive and satisfying work environment.

Morale can be defined as the degree to which an employee feels good about work and

work environment (McKnight, Ahmad and Schroeder, 2001). In a study by Pestonjee and Singh

(1977), morale is defined more concisely as an attitude based upon workers’ faith in fairness as it

pertains to employers’ behavior and policies, the adequacy of direct leadership, a sense of

organizational participation and a general belief that the organization is worth working for. In

other words, employees with high morale feel engaged with their jobs and with the organizations

for whom they work.

Employees have been confronted by turbulence in the workplace since the beginning of

the Recession in 2008 (White, 2013). Upper management looked for ways to cut costs as well as

deal with rapid succession in advancement of technology and a quickly changing global

marketplace. Employees became stressed concerning the unpredictability in their workplaces

and the security of their jobs. This resulted in a decrease in employees’ sense of loyalty and

investment with their jobs. This disconnect was recognized by human resource professionals as

employee productivity and retention decreased. In addition, poor employee attitudes and

absenteeism increased (White, 2013). A Gallup survey conducted in 2013 confirmed that this

disconnect continues. The survey indicates that only 30 percent of workers in the United States

are actively engaged with their jobs (Gallup, 2013).

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Incentives or rewards and recognitions appear to be one solution for improving

engagement, thus improving morale. The need for incentives to improve morale seem to

increase in times of tight resources and cutback managements (Greiner, 1986). Greiner (1986)

examined these issues as they pertain to government and found that tough economic times

contribute to a reduction or delay of investments needed to maintain human capital. This results

in less training, deterioration of salary levels and other reward systems and few opportunities for

career growth. These factors also contribute to employee disengagement. Employees decide

that they will cut their losses by reducing their contributions to their work. Research in the

private sector as well as the public sector has shown that effectiveness of monetary incentives in

stimulating performance decreases with the size of the incentive group. The implementation of

individual incentives seems most effective, followed by group incentives. Organization wide

incentives appear to be the least effective (Greiner, 1986).

Most organizations believe in the power of incentives to increase morale. A reward

system is based on behaviorist theory or observable behavior that occurs in response to a

stimulus. Examples of employee incentives/rewards/recognition include bonuses, stock options,

gift cards, plaques, vacations, banquets, and special privileges. According to Kohn (1993),

research suggests that rewards are only successful at achieving temporary compliance: they do

not change attitudes and behaviors or evoke lasting commitment. When the rewards end, people

revert to their previous behaviors (Kohn, 1993).

Incentives may actually have a negative impact on morale. Kohn (1993) purports that

rewards can cause employees to feel manipulated. Managers manipulate employees by making a

highly desired reward contingent upon certain behaviors. If employees are expecting a reward,

and then do not receive it, they may feel that they are being punished (Kohn, 1993).

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Manipulation, control and punishment do not appear to be factors that would contribute to

building morale in employees; therefore, if incentives in the workplace are evoking these factors,

then they may not be successful in boosting morale.

Rewards and recognition can also damage relationships in the workplace by causing

employees to compete against each other (Kohn, 1993). This competition destroys cooperation.

For every one person that wins, there are many who loose. A limited number of incentives

causes employees to see each other as obstacles to their own success (Kohn, 1993).

Research suggests that employees value relationships in the workplace and that these

relationships may be the most important factor to increasing morale. In a study conducted by

McKnight et al (2001) computer operations professionals in a large corporation in the travel

industry were interviewed. When asked about what impacted morale, the operators frequently

discussed the relationship closeness that they felt to their manager. These employees valued a

close relationship between management and employees and felt motivated when efforts were

made by management to build relationships and treat employees as equals. The study also found

that based on the close relationship, managers were more successful in the areas of autonomy,

feedback, and incentive controls. Relationships with employees can be strengthened when

managers frequently interact with employees face to face, remove structural barriers that create

social distance between management and workers and share strategies and plans with employees

(McKnight, et al, 2001). Greiner (1986) added that the key to sustaining motivation programs is

visible commitment and support from management. Incentive programs are fragile management

initiatives. They must be nurtured and supported by managers in order to improve productivity

and renew human capital (Greiner, 1986).

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Several other studies support the importance of relationships to morale. Pestonjee and

Singh (1977) found that the behavior of supervisors exerted an influence on worker morale.

Workers managed by supervisors who were employee oriented were found to have higher

morale, while those working for production-oriented supervisors exhibited lower morale. A

human relations management style by an immediate supervisor resulted in enhanced job

satisfaction as well as better production. The result of this study suggested that supervisors

should be trained not only to perform technical duties, but also in the area of human relations

(Pestonjee and Singh, 1977).

Corey (1973) also espoused the importance of relationships as contributing to morale. He

identified the manager as the person responsible for developing good morale. He suggested that

managers, no matter what their management level need to understand human relationships. They

gain this understanding of people through training and practice. Supervisory competence is

demonstrated when managers not only understand factors that motivate individuals, but also

display confidence and respect for their employees (Corey, 1973). Again, communication was

seen as vital to developing relationships. Corey (1973) cautioned that managers must be aware

of views and attitudes of employees in order to establish full communication. This is sometimes

more difficult in large organizations where employees do not know top management. It then

becomes the responsibility of the immediate supervisor to communicate with upper management

in order for the employee’s voice to be heard. Another responsibility of management is that of

motivating employees by providing challenging jobs for which they are qualified, and jobs that

can be performed effectively and lead to increasing responsibility. Training engages employees

and causes them to feel that a personal interest is taken in their development and results in better

attitudes towards supervisors (Corey, 1973).

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Good relationships between co-workers are also important (Corey, 1973). A worker’s

status in his/her group may not be determined entirely by the employer. When management

witnesses prejudice or maltreatment, corrective action should be taken. Positive actions to

encourage workers to develop better understanding by becoming better acquainted helps reduce

resentment and increases morale (Corey, 1973).

Coworkers and immediate supervisors influence how employees relate to and feel about

their organizations (Colan, 2009). Individuals in their work lives have a need for intimacy by

being connected to those around them. Lack of a connection to others causes disengagement.

Employees who share common direction and sense of community achieve their goals more

quickly and easily. Colan (2009) suggested that one strategy for meeting employees’ needs for

intimacy and improving morale is to create rituals and celebrations. Managers that are true

leaders make it a priority to establish rituals. These rituals can be created around hiring,

recognitions, productivity, innovation, promotions, volunteering in the community, etc. Events

that foster intimacy, belonging and fun are suggested as ways to boost morale (Colan, 2009).

Retention of employees and boosting morale can be increased by showing appreciation

for employee effort, commitment and enthusiasm. It also helps employees feel connected and

valued and strengthens relationships. Cash bonuses and gift cards are often used to acknowledge

contributions, but are not powerful enough to engage employees because they are not visible or

personal and do not tend to build relationships. Face to face interaction is important in a high

tech world (Colan, 2009).

Based upon this research, close relationships between supervisors and employees do

seem to be the most important factor contributing to employee morale. The assumption is that

supervisors/managers have been properly trained and have developed the necessary skills to

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create and sustain these relationships. Even if they have the capacities, they may not have the

motivation to engage. Pater (2013) cites some reasons as to why managers, who are leaders in

their organizations disengage. He describes these as ADD: arrogance, distraction, and

disconnection (Pater, 2013). Arrogance involves thinking by the manager that he/she is infallible

and smarter than everyone else. This leads to underestimating others and overestimating that

managers have all the right answers. Distraction is a loss of focus. Disregarding feedback,

making unrealistic plans, and lack of concern for others’ work progress are all signs of

distraction. Disconnection can destroy trust because managers may talk as if they are experts

about topics that they really know nothing about. Disconnection also involves not being

“present”, not seeming to care, and not looking after employees’ best interests (Pater, 2013).

Overcoming arrogance, distraction, and disconnection requires self- monitoring and

control over one’s mindset, focus on the big picture, and increasing contact with employees

(Pater, 2013). Training managers how to engage, self-monitor, and self-correct is recommended

in order for them to successfully create and maintain close relationships with employees. Failure

to do so will directly impact the vital relationship with employees shown to be the most

important factor contributing to morale.

In conclusion, economic issues since 2008 have contributed to a lack of engagement by

employees and a reduction in morale. One strategy for counteracting this issue is for

organizations to provide incentives, rewards, and recognition. There is some debate as to the

effectiveness of this strategy because these incentives may be interpreted as manipulative,

controlling, and punishing and can even damage relationships between co-workers. Research

suggests that close employee relationships with managers and supervisors is vital to boosting

morale. Many suggestions for developing this relationship have been examined including

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communicating by interacting with employees face to face, providing them with training and

opportunities to advance, showing respect and confidence in them, sharing strategies and plans,

developing a sense of community, creating rituals, and expressing appreciation. Training

managers to be employee-oriented in order to build close relationships is vital to increasing

engagement and boosting morale and will result in higher productivity. Further research

resulting in the development of best practice regarding managerial training in human relations is

recommended.

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References

Colan, L. (2009). The Emotional Side: Engaging the Heart. In Engaging the Hearts and Minds of All Your Employees (pp. 125-152). New York: McGraw Hill.

Corey, John B.W. (1973, January).Motivating Employees. Journal (American Water Works Association), Vol 65, No. 1, pp. 39-41. Retrieved November 14, 2014 from http://www.jstor.org.proxy.li.suu.edu:2048/stable/41267175.

Gallup. (2013). State of the U.S. Workplace: Employee Engagement insights for U.S. Business Leaders. Washington D.C. Gallup, Inc.

Greiner, J. (1986). Motivations Programs and Productivity Improvement in Times of Limited Resources. Public Productivity Review, Vol 10(No. 1), 88-101.McKnight, D.H., Ahmad, S. & Schroeder, R.G. (2001, Winter) When Do Feedback, Incentive Control, and Autonomy Improve Morale? The Importance of Employee-Management Relationship Closeness. Journal of Managerial Issues, Vol 13, No. 4, pp. 466-482. Retrieved November 13, 2014 from http://www.jstor.org.proxy.li.suu.edu:2048/stable/406043565.

Kohn, A. (1993, September 1). Why Incentive Plans Cannot Work. Harvard Business Review. Retrieved November 22, 2014 from https://hbr.org/1993/09/why-incentive-plans-cannot-work/ar/1.

Pater, R. (2013). Overcoming Leadership ADD. Professional Safety, 58(11), 30-32.

Pestonjee, D.M., & Sing, A.P. (1977). Supervisory orientation and employee’s morale. Journal Of Occupational Psychology, 50(2). 85-91

White, S. (2013, September 1). Rewards & Recognition: 2014 Trends Report. Retrieved November 18, 2014, from http://www.slideshare.net/imsosarah/2014-trends-report-rewards-and-recognition.

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