Tough economic times can lead to misguided perspectives.
We have recently encountered a disturbing lack of concern for employee morale on the part of some executives. The head of HR at one successful organization even told us that employee morale in the organization was irrelevant. What’s more, that view is not an anomaly. The most common rationale we have heard executives use to discount the importance of employee morale in the current economic environment is that when economic times — and the job market — are tough, employees will not leave because they have no place better to go.
However, a lackluster economy should not give organizational leaders a “free pass” to ignore morale issues. With all of the changes that occur in any organization over time, employee morale will undoubtedly be affected. Some of the most common changes that companies have been implementing to stay competitive over the past few years — or in some cases just to survive — include mandatory overtime, an increased use of temporary employees, outsourcing, restructuring and downsizing. Such changes typically have a detrimental effect on employee morale.
While turnover associated with low morale may not be as likely during uncertain economic times, productivity and performance issues should command executives’ attention. There is still debate over whether a happy worker is always a productive worker, but researchers and businesspeople alike are likely to agree that low morale will not help boost productivity or improve performance. More generally, senior leaders should realize that low morale can be detrimental to the overall climate and culture of their organizations. Low morale stifles “going-the-extra-mile” behavior, and an “it’s-not-my-job” syndrome can become epidemic when managers are not paying attention to the organizational climate they are creating. Over time, a decline in organizational citizenship behavior can translate into an unhealthy cultural shift that erodes the business’s overall competitiveness.
Longer term, treating employees well and taking other measures to improve employee morale can be important aspects of implementing a strategy to attract top talent. If you are not concerned about morale and not making an effort to improve it now, your employees won’t easily forget when the economy improves and they start having more job options. Rest assured, they will likely pursue those alternatives.