Improving Company Morale and Employee Motivation

Understanding the Roles of Company Morale and Employee Motivation

Happy employees are productive employees—those who stay for years, turn into leaders and help your company flourish over time. The key to happiness and productivity at work is using employee motivation to inspire your team to do their best.

When we talk about motivation at work, there are two terms most often throw around: Employee motivation and company morale. Both are crucial to your organization’s long-term success, but they mean different things, with one influencing the other.

Employee motivation is simply what causes employees to pursue their work. It’s what makes them—and you—act in a specific way.

Company morale, on the other hand, is how employees feel about the workplace and can encompass everything from job satisfaction to company outlook. It’s most often used to define employee happiness as a whole.

In a nutshell: Employee motivation is the drive and company morale is the result.

What is Company Morale?

Company morale is defined as how employees feel about their workplace. This includes feelings about their manager, their long-term role within the organization, their benefits package or the overall company culture.

While there are a range of factors that influence company morale, it’s well documented that it has a massive impact on productivity. The Gallup Organization estimates that 22 million employees are actively disengaged at work, costing the U.S. economy between $250 and $300 billion each year in lost productivity. “When you add workplace injury, illness, turnover, absences, and fraud, the cost could surpass $1 trillion per year, or nearly 10% of the U.S. Gross Domestic Product (GDP).”

The overall functioning of an organization hinges on employee happiness. It drives multiple facets of an organization, including productivity, employee health, company profitability and even customer satisfaction (yes, happy employees lead to happy customers).  
Low morale, on the other hand, leads to weak organizational culture, low concentration, missed deadlines, and high turnover.


The Theory of Employee Motivation

There are two scientific theories of employee motivation: extrinsic and intrinsic.

Extrinsic motivation is whatever external factor causes an employee to complete a task. In most offices this is pretty simple, boiling down to punishments and rewards. A punishment might be getting fired because you didn’t do your job. A reward includes things like getting paid for your time or receiving a promotion for a job well done.

Keep in mind, simply getting paid to do a job is often not enough to really motivate employees to excel, despite what many organizations think. That’s where intrinsic motivation comes in.

Intrinsic motivation, however, comes from within and doesn’t rely on immediate gratification provided by a manager. Employees are intrinsically motivated by the work itself. For that to happen the work must be fun, fulfilling or tied to a higher goal that resonates with that employee’s values or desires.

This type of motivation is usually more effective than extrinsic, primarily because a person’s own desires are more powerful than the desires of those around them. However, intrinsic motivation is harder to control and facilitate—but we’ll talk more about that below.  

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What Motivates Employees?

In general, employees are motivated by different things including money, power, happiness and work-life balance. The trick is to discover how to inspire employee motivation and create a work environment where employees are motivated both intrinsically and extrinsically.

There are a handful of recognized techniques that motivate nearly every employee:

Celebrate employee accomplishments—When you appreciate someone’s efforts—whether it’s a successful project launch or working through the weekend—they tend to better appreciate the work back. Making someone feel good about their contribution is one of the most effective ways to motivate an employee.

Encourage team bonding—Successful companies offer fun perks that let employees form personal bonds, while letting them take a break from the day-to-day. If you have a small team, you could buy pizza for everyone on Fridays and take a long lunch together. Some companies throw lavish quarterly parties, while others host team events like scavenger hunts or game days. It doesn’t have to be complicated or expensive. Even a simple happy hour gives your team a chance to bond and unwind.

Give autonomy—Empower employees to think and take action by themselves. When team members are encouraged steer the direction of their work, they tend to feel more invested in the end result. Most employees feel like their manager has to give permission for every single decision. Not only does that lead to low motivation, but needlessly slow progress. So let your employees set their own goals, accomplish their own projects and—ultimately—feel pride for their own wins.

Reward employees when the company performs well—The most successful compensation programs give all employees a reward when the company sees financial success. This could be in the form of a bonus or equity package, as long as the employee sees that their work directly has an impact.

Support their long-term career goals—When a manager truly cares about where your career is going, you become that much more motivated to get there (by doing your work and doing it well). As the employer, there are a number of ways you can go about this, from formal mentorship programs to an education stipend. Regular check-ins on employee progress keeps them on track and focused on their individual career goals.

Promote healthy work-life balance—As much as possible, organizations should be flexible around commitments like family emergencies, doctor’s appointments and weekend plans. These small gestures make a big difference in how employees feel about the workplace. It also results in team members coming in on a Monday refreshed and focused.

Listen—Your team is a wealth of information. Listen to their ideas, their problems and their frustrations. Some CEOs meet with every employee each year, while other companies send regular pulse surveys so they’re always in the loop.

There are also plenty of ways to demotivate employees. It may sound like common sense, but make sure managers don’t lose their temper, take credit for others’ work or be stingy with praise. It’s just as important to make sure you’re not participating in activities that will actively increase turnover as it is to actively offer programs that motivate your team.

Why Having a Strong Company Morale and Motivated Employees is Important for Success

Even if you can’t quite “put your finger on it,” you’ll know if company morale is low or employees don’t seem particularly motivated. Maybe it’s consistently missed deadlines or an eery silence at lunchtime.

Low morale leads to poor cooperation, low productivity and increased turnover. It’s an undisputed fact: If your employees aren’t motivated or happy, your business will suffer and fail to reach its long-term goals.

On the flip side, strong company morale has the opposite effect. A happy office environment is one that attracts the most talented workers, and when those works are motivated, they’re productive and rarely quit. Simply put, when you care about your employees, they in turn care about your business.


How Motivated Employees Improve a Company’s Morale

Overall, motivated employees lead to elevated company morale. Each individual team member’s happiness will result in a happier company.

For example, a high morale employee experiences less stress. Less stress means less absenteeism. These happy employees are also more engaged, harder-working and committed to your organization’s goals. These qualities rub off on other team members as well, creating a culture of positivity and camaraderie.

Motivated employees also band together in a crisis. Big or small, every company goes through dips and dives. But surviving the more difficult points is so much easier when employees are motivated to pull through together—sacrifices are shared and your team will work as one, feeding off each other’s respect for the company and shared mission.

How CultureIQ Can Help You

How CultureIQ Can Help You

Improving company culture—and therefore company morale—starts with one thing: Listening. Are employees pleased with your new benefits program? How is morale after the recent merger?

Only by listening to your employees—their suggestions, their frustrations, their enthusiasm—can you can truly to begin to understand (and shape) your culture. Once you understand where it is now you can start guiding it towards where you want to be.

CultureIQ is the only culture software that helps you turn that data into action. Our benchmarked survey, intuitive software and seasoned strategy team give you unparalleled insight into what’s happening within your organization, plus guidance on where to focus next.

Your employees already have the insights you need—we just help you listen and take action.

Interested in learning more about employee-related issues and how to best approach them? Read more about how to resolve them through employee wellness program implementation here.

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