Why Morale and Engagement Are So Important

(first published in this form in humanresourcesiq.com April 1, 2010)

Author’s note: this is an abbreviated and edited version of part of a Chapter in my book, detailed below. 

If there is one word which encapsulates the benefits which accrue from a high morale organization, it is this: performance. This refers to performance at the individual level and that of the organization as a whole. Evidence for morale correlating highly with, and driving, performance is strong and growing.

If you have competition such as most organizations in the private sector (although increasingly public sector organizations have competition), then high morale will increase your competitiveness. If you serve customers, your customers will be more satisfied when served by high morale employees; those customers will also be more likely to return to you. If profits are your goal, you will increase the likelihood of these. If you have a publicly traded stock, even your earnings per share can correlate strongly with your morale level. If you are in the public sector and have a mission, like in the military or law enforcement, you will be much better at fulfilling that mission; indeed many in the military say that without good morale, missions become much more difficult or even impossible to achieve.

At the individual level, the high morale employee will experience less stress than the low morale one and as a result, less absenteeism and sick days; the high morale employee will be more engaged, willing to work harder, be more committed to the organization’s goals than the low morale one, and certainly be a stronger advocate for the organization with others such as customers, family and friends or potential employees.

Combining morale with organizational performance is one of the central focuses of the morale field of study, since consultants in this area are so often faced with the “so what?” question, such as: 

“I like the general idea of high morale and it sounds like a good thing, but what does it really do for me?” 

An alternative and more negative view is often:

“I’m in business to compete and make a profit; this stuff is a waste of time and won’t change a thing.”

Against this background, to counter these still widely held views and demonstrate just how powerful morale is, we will summarize many of the performance and effectiveness benefits of the high morale organization here. Everything you will read on this topic is backed by solid data, in nearly all cases from multiple sources.

• Morale Provides a Competitive Edge in Good Times and Bad

Surviving a crisis (for the organization alone or for the society in general) is far easier when morale is high. The team pulls together and works as one. Sacrifices are shared much more easily. High morale is therefore more than protective armor, although it does play that defensive role: it offers an offensive path through the crisis which those lacking it will not be able to follow.

• High Morale Supports the Implementation of Organizational Strategies

 It’s not your plans that are important; it’s whether you can implement them. A good strategy is a fine thing, but it is useless unless you can make it happen. Making it happen depends to a large degree on your people, and therein lies the power of morale.

• The Morale Process (Measurement-Implementation) Gives Employees a Voice

It sounds like a circular argument, but it is true: simply measuring morale and feeding back the results, when carried out correctly, improves morale. Over and over again, employees have thanked us for being in their organization, collecting their opinions and letting them know how they and their colleagues feel as a group.

• High Morale Helps Organizations Attract and Retain Talented People

Organizations selected by Fortune and the UK equivalent Sunday Times Best Places to Work, trumpet their appearance on such lists in recruitment advertising, not just at the point of sale like at Starbucks, but also in newspaper and online ads. They are eager to let the world know how good it is to work for them. 

• High Morale Makes the Workplace Easier to Manage and Increases Productivity

Stripped of the dramas created by negative morale situations and the challenges of dealing with people who like to perpetuate them (from individuals with no management responsibility to managers themselves), the high morale workplace becomes less fearful, stressful and more “fun”. Management time can be focused on things which make the organization more productive, not just “putting out fires” related to personnel, or replacing the people who have left. 

• High Morale Reduces Workplace Accidents, Reduces Absenteeism, Reduces Workplace Stress, Improves Employee Health and Reduces Sick Days Taken

 Plenty of evidence exists for all of these claims; in fact the evidence is so overwhelming that it is hard to imagine why organizations do not implement practices which would lead to a maximum level of morale, even if only to gain just these advantages; and yet many do not.

• High Morale Organizations In The For-Profit World Have Better Financial Performance Than Low Morale Ones

There is strong evidence from multiple and highly credible sources that morale is positively correlated with higher stock prices, higher earnings per share, and even 5 year survival following an IPO.  

• High Morale Organizations Can Have Higher Customer Satisfaction Than Low Morale Ones

A great deal of research shows the morale-customer satisfaction connection, and demonstrates causal connections between the two. 

• Morale is a Leading Indicator and Allows Organizations to Prevent Potential Negative Situations

 By examining trends based on previous employee survey data you have collected, you can have a sense of how the future will play out if you take no action. This is especially true when a poorly performing manager is having a negative effect on employee morale.

• The Morale Process Is One Of The Most Democratic Activities In Which An Organization Can Participate

There is nothing quite like giving every single person who works in an organization the chance to say exactly what they feel, knowing that top management will look at every piece of data and every written word. 

• High Morale At The Individual Level Is Connected To Job Performance By That Person, And Is As Good A Predictor Of That Performance As Other, Well Tested Measures

Multiple studies now demonstrate that there are few activities one can undertake better than knowing a person’s individual level of morale, in order to predict how they will perform on the job.

Faced with the overwhelming evidence for the power of morale and its effect on organizational performance, some put forward the idea that the relationship is actually reversed, i.e. performance drives morale. While there is a “loop” effect, in that a customer’s positive feedback about a company’s product or service to a sales representative can boost that individual’s morale, for example, the evidence supports a much stronger effect in the other direction, from morale to performance.  

Recent data from Gallup show that the US workforce is only 29% “engaged” at work, and the Conference Board states that US job satisfaction has been falling for two decades. Europe is, if anything, even lower.  With the US and Europe facing ever more intense competitive pressures from high workforce morale countries like India, China and Brazil, they cannot afford to fall behind; it is in their interest to do all that they can to enhance the morale aspect of work life.  If they do this, the morale and engagement of their people will be one of their key competitive edges in an increasingly global marketplace.

 Excerpted from Employee Morale: Driving Performance in Challenging Times by David Bowles and Cary Cooper. Copyright © 2009 by the authors and reprinted by permission of Palgrave Macmillan, a division of Macmillan Publishers Limited. All rights reserved.

Job Satisfaction is DOWN but Engagement is FLAT or UP? How can that be?

Recent data from the Conference Board tell us that this Great Recession has slammed job satisfaction.  The numbers speak for themselves and reflect a long downward trend over time:  US satisfaction is at the lowest level in two decades.  From 61.1% satisfaction with the job in 1987 to 45.3% in 2009, the drop really is quite precipitous.  Should we be alarmed?  Maybe we should “wait to worry”, as my accountant once told me 5 minutes before a tax audit (I didn’t have to pay more, he was right).  We first need to look at some other data, then try to make sense of it all.  The other data comes from an equally reliable source as the Conference Board, Gallup, a company in which I have great confidence, and who were gracious enough to share their data with me for my book.  Gallup’s recent data on employee engagement in the US are quite stunning:

They show that engagement has hardly shifted at all during this recession;  if anything it has moved slightly upward.

Can these both be true?  Is there some methodological reason in the research why the data seem to contradict each other?  It is certainly true that the Conference Board and Gallup use a different questionnaire, since Gallup’s is the well-known “Q-12″, or 12 item engagement questionnaire.  As a proprietary measuring instrument, it is probably nothing like the CB questionnaire on satisfaction.   Using sophisticated statistical analysis, Gallup found that it could predict all major elements of engagement with these questions, and no more than 12 were required.  I certainly understand this, in my own consulting firm’s research we could, for certain clients, predict an entire morale survey’s result from one question:  that question was how the employees rated their manager’s ability.   For fans of correlation,  it was slightly more than +0.88, a very significant result.  The power of (local, not top) management to influence the morale of employees was demonstrated quite clearly.  Gallup can therefore easily make a good case for a 12 item engagement questionnaire.  The Conference Board no doubt also has a well-tested and stable instrument with which they measure job satisfaction every year.  In any case, knowing the quality of these two organizations, I doubt that any methodological errors drive the difference between the data.

This means we have to turn to whether “engagement” and “satisfaction” are different, and indeed they are.  Satisfaction, and in this case with the job only, is a very specific element in the overall morale at work, and in my own research I was never able to correlate that specific element very highly with overall morale, unlike the rating of the manager.  It was just one element in a questionnaire which, for us, often ran up to 110 items, and is equally just one element in morale.  Employees seem to compartmentalize feelings of satisfaction or dissatisfaction they have about the job itself, the company, and so on, and these feelings don’t have anything like the influence on their morale as how they are treated by management.

Engagement is something quiet different.  My previous post on this might interest you if you want a bigger discussion of the difference between engagement and morale, but essentially engagement is the behavior that people exhibit when the have relatively high morale.  It’s all about volunteering for tasks,  willingness to “pitch in”, “go the extra mile”, and especially talk up your organization as a place to work or place with which to do business.  So engagement is a broad brush, job satisfaction is a part of that brush.  This means they can differ from each other.  In the Gallup article linked above, the author makes the case that the recession has made managers more likely to try to engage employees, treat them better, etc. because their companies don’t have the money to make financial investments in their workforce.  They go back to the intangibles, the non financial incentives like recognition.  Things they should have been doing all along.  This would explain why, even in a recession, engagement might edge up.  So why would job satisfaction drop?  Because people are being asked to do more with less, they see others being laid off, they are scared of that happening to them…but remember the people in these surveys have jobs, we are looking at the survivors here!   That also counts towards better morale/engagement, its like “hey it’s not all bad, I still have a job, maybe I work harder but I am still here”.  If we add to that the Gallup idea that bosses are trying harder to treat people better in these hard times because that is all they can afford to do, then we can imagine why engagement might be stable in spite of loss of good feeling about the job itself.

As I said earlier, job satisfaction can be quite independent from other feelings of satisfaction:  for example (and I have found this often when surveying workers), people can like their job much more than they like the organization for which  work.  This happens when you have a skill or a profession or something you really like doing, whatever it is, and the job gives you the chance to do that every day.  Or you might not like the actual job but you like the fact that you have a job in the first place.  You can feel all this but at the same time be anything from mad as hell at the company, to simply indifferent, for many reasons.  Your commitment is to the job/profession or whatever it is, not to the organization.  Of course this is less than optimal because you are then much more likely to leave.  Your engagement is only to the job, not to the broad spectrum of things which I have mentioned above, and so you are far from an ideal employee as a result.  Companies need to counter this with all the things which drive good morale, and which are too numerous to list here;  but most of all, good management.

I’ll post more on this as more data become available.  Let me know what you think and what you see happening in your organization; I’m always interested to hear peoples’ experiences.

Happiness at Work II: More Thoughts

I find this subject quite fascinating and judging by traffic here on the blog, more than a few of you do too.  Reactions to the original articles by Sue Shellenbarger in the WSJ (see my Happiness at Work I post) have also been interesting, ranging from those who say that this is fabulous, to those who seem to think this is the typical work of manipulative, scheming management out to exploit the workforce with a cynical appeal to something which appears (on the outside) so kind.  In other words, its a lot like the reaction I get when I tell people I work in the area of morale at work;  most people beg me to come to their workplace as soon as possible, but some (especially in Europe which is very interesting and the subject of a future post here) think this whole morale/engagement thing has the purpose of driving the enslaved workers even harder.

I wrote to Sue and also posted a reply to the article online at the WSJ and wanted to share one of these with you, at the risk of a little overlap with my first post on this subject.  Basically I said that happiness is fine, trying to bring something positive like that to the workplace can’t be all bad, but that it might have limited effect, based on how dysfunctional the internal culture is.  Here is what I wrote to WSJ reporter Sue Shellenbarger:

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Sue your recent work on happiness at work is very interesting,  but I have a few issues with it:

– if I overlay the world’s happiest nations like Denmark, Holland, etc. on a chart of the countries with the world’s highest workplace morale (currently China, India, Brazil), there is not much overlap. Why is this?  Maybe because workplace morale has to do with a lot more than being happy. Happiness might want you to relax or take the day off and go to the beach;  high morale and its resulting behavioral component, engagement, make you want to contribute, go the extra mile, tell others about how great your company is as a place to work or buy from, etc.

–its all very well to encourage people to take a positive view but that is not always easy.  Even Eckhart Tolle (whom I love, thanks for the reference to him!) suggests that quite a few situations require us to get out.  Lets imagine an employee furious that his CEO makes 300-400 times his pay and benefits (the US average, far far above worldwide figures) and has a golden parachute if he screws up (a la Nardelli at Home Depot), something this employee would never been offered.  Rick Wagoner at GM destroyed 96% of the GM share value during his tenure and barring bankruptcy was set to receive a nice $20 million retirement package. Should HD and GM people be “happy” about this?

–there is plenty of evidence that high morale and engagement is a strong correlate and driver of performance, and some of the studies you mention note that happy people perform better, but that happiness might be part of their overall morale, but only a part.  They didn’t get to that high morale just by learning to be happy, they got there also because management treated them well, gave them power to make decisions, a chance to grow on the job and many many other things.  Put a “happy” person in with the boss from hell for a few months and lets see what happens….

I am all for people taking responsibility for their own well being;  but we also need to shake up management in this country and improve our pitiful standing in the morale sweepstakes: Gallup says only 29% of US employees are engaged at work, and Mercer has us at below average worldwide in engagement.  In an increasingly competitive world, with all the performance benefits of high morale that we now know about, we cannot afford to stay here!

Anyway, great discussion and thanks for the chance to contribute.   FYI my philosophy is strongly capitalist and not pro government intervention, but mindful that, like football, we need clear rules and enforcement of them to ensure fairness.  Kind of like John Mackey, of whom I am a big fan.

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Lots of people writing to the WSJ wanted a job as a happiness coach, they think it is like going to a workplace with a bunch of drinks and having an instant “five o’clock somewhere” Happy Hour!  Would that it were so simple, right?  I’ll stick with my position that learning about oneself and learning to be happy is a huge part of life, and as valuable a resource for dealing with life’s ups and downs as anything I know.  Everyone should try and find a way to do this, and if they did we would have a better world.  But there is more to organizational culture and the building of high morale than this and we need to be careful that people don’t hang on to this as a superficial “fix”, especially in difficult times.  Don’t forget what I told Sue:  the “happiest” people in the world DO NOT have the highest morale at work.

Let me know what you think!

Happiness at Work 1: Is it Enough?

There has been a lot of talk lately about “happiness” at work;  several new books seem to be coming out, and the Wall Street Journal has featured the topic more than once via the work of its reporter Sue Shellenbarger (see http://blogs.wsj.com/juggle/2010/01/27/workplace-blues-call-a-happiness-coach/?KEYWORDS=happiness+at+work and http://online.wsj.com/article/SB10001424052748704905604575027042440341392.html?KEYWORDS=happiness+at+work)

Sue does a great job of describing what is happening, not only the books being produced but of course the new happiness gurus and coaches which have appeared!   She makes it clear that there are mixed feelings in the consulting community about this but also makes a good case that this kind of intervention really works.  I wanted to share my take on this and in the next post will show you what I wrote back to Sue at the WSJ web site on the subject.

First of all as someone who has trained intensively over many years in psychology, I felt it was part of my training to make that inner journey into my psyche and find happiness;  how could I help others, if I was blocked inside?  How could I work in the area of morale at work if my own morale was sub par (which it had been for years when I started “psych”)?  The old joke is that psychologists are more messed up than the average person, and this is the reason they get into the field, to which I say, I resemble that remark!  But unlike the joke, I don’t generalize it to ALL others in the field (OK yes certainly some).  In any case becoming “happy” was something which happened as a result of my journey;   how can I therefore not recommend that to people at work?  The answer is that I do recommend it, but I also have a word or two of caution:

–I recommend it to anyone, anywhere, that if you have the great privilege to be able to work on your inner processes, understand your thoughts and operation of your mind, let go of your past, you should jump at it!  Quite apart from what happens to your personal relationships (hint:  they get better), if you end up as a manager somewhere you will be a much better one, I assure you.  If you have learned about your ego, then that ego will not control what kind of manager you will be.  Have you ever met the ego-driven manager?   She (these things have no gender preference) always takes credit for what YOU do, never hires anyone smarter than herself, and so on…the list in endless).  If you have let go of your past, you will be a better employee, not always seeing your boss as a “bad Dad”, for example.  If you have learned to take personal responsibility for your life, even better, this is a HUGE step forward, to let go of victimization and blame.  All of this will make you happier at work, because these things (ego, living in the past, “victim mentality”) create enormous stress for both the perpetrator and those around her/him.  So yes, if you can go through this, jump at it and embrace the changes because you and your loved ones and co-workers will all benefit from your growth.   To the extent that a “happiness coach” at work can teach these things, I would say, fine.  As it turned out, I found a way to do this and pay for it myself outside the work place, which involved a lot of financial sacrifice for a starving student but was well worth it.   But having said all this, even if many of the workers in a team have gone on this journey and reached a good “happy” place inside, it is not enough to create a high morale work environment.

–It isn’t enough because no matter how happy a person you are inside, you can run into major roadblocks at work.  Consider the following:  Jean is a generally happy person, not all the time but most, just like the rest of us.  She gets a job at XYZ Corp. where she works for Fred’s team of salespeople.  At first, everything seems fine, as good as she had expected when she had the interview with Fred and a couple of team members.  Then, rather like in a marriage, she starts to see below the surface and Fred’s best behavior breaks down to reveal a darker side (I don’t mean that marriages always reveal darker sides, although they can…only that” best behavior” breaks down to reveal what we have been hiding).  Fred turns into a “boss from hell”, ego driven, critical;  nothing is good enough for Fred.  The team members who had seemed so content in the interview reveal that they have had to deal with this for years.  How is Jean’s happiness doing now?   She knows how to take responsibility for her life, and of course she can leave….but wait, there are no other jobs like this anywhere near where she lives and her husband cant quit his job and move to another city.  What should she do?  She can complain about Fred to Fred’s boss but Fred’s boss is just like Fred and that is the reason he hired Fred (saying Fred will be a “good fit”, meaning a good fit to his values and OWN “boss from hell” behavior!)  Clearly, Jean is stuck and her well-being and happiness will suffer until something is done about this dysfunctional work culture.

If you think about it, a happiness coach might have limited traction in this environment;  some cynical members of Fred’s team might say that if Fred’s boss in the example above brought in a happiness coach, it would be like putting a smiley face sticker on an empty gas gauge (a wonderful comparison attributable to Esther Hicks)…and they would be right!  What is needed here is a good house cleaning, hopefully resulting in the departure of Fred and his boss.  Does this sound a bit cruel to Fred?  No its not cruel, because these kind of people can rarely be rehabilitated, and even if they are it takes time during which the team might continue to suffer.  This type of action is actually the reverse of cruel because it frees a whole team from a dysfunctional boss or bosses;  I use a phrase in the book which is appropriate here:  “sacrifice the one for the many”.

With Fred and his boss gone, perhaps morale can be rehabilitated in XYZ Corp.  Perhaps…maybe the dysfunctions run deeper, in which case much more needs to be done in the short term, not to mention the longer term deep cleaning and cultural shifts which are usually required to create the true high morale culture.  I have had clients in which this process took years, but they committed to it and saw it through;  now they benefit from all that work with the huge performance advantages of a high morale workforce.  And as a result of this the employee surveys show, guess what?  Yes that people are HAPPY to work there!

So, happiness at work, yes I am all for it.  But if the gas gauge shows empty, don’t cover it up with something superficial, do everything you can to fill that tank!  I’ll post more on this soon, including my letter to Sue Shellelbarger at the WSJ and my post on their website.  I’d love to hear from you on this or any other topic on my blog.  Tell me what you think.

Welcome to the Morale/Engagement and Performance Blog

Hello I’m David Bowles and I want to welcome you to my blog on morale/engagement and performance, the theme of a book published worldwide by Palgrave-Macmillan (see tabs above and picture below), which I co-authored with Professor Cary Cooper.  Instead of just focusing in the book on “what to do on Monday morning” to improve morale and engagement, Cary and I have looked in depth at the performance connections with morale…the things which are the answer to the question: “why should I care about this touchy-feely stuff”?  As we say in the book, performance is the reason why you should care and why organizations large and small are making morale and engagement “mission critical”.  I look forward to sharing with you here the research-based data we feature in the book and discussing your reactions to, and experience with, what I have to say.  Whether you are interested in productivity, profitability, customer satisfaction, worker health or innovation…all are affected by, and our data show, driven by, high morale and engagement.  Coming at a time of unprecedented stress and upheaval in organizational life, the drive towards high morale and the workforce engagement which results from it, can be our way towards success in the tough, globalized world which is our future.  I look forward to sharing this journey with you and hope you will contribute your ideas and thoughts.

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