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Why Improved Morale Can Boost a Company's Profitability

By Edited Sep 29, 2015 6 6
Smiling woman working on computer
Credit: highwaysengland (via Flickr)/CC by 2.0 with Attribution

Employees who feel valued by their organization generally possess stronger morale. If good morale is not present, a smart leader will look for ways to increase it and foster higher levels of enthusiasm in the workplace. Doing so not only benefits employees,  it is beneficial to the organization too.

Ultimately, increased morale in an organization is truly a win-win strategy.

When management makes strides and puts forth a strong effort to retain good employees, they can better effectively create an atmosphere full of strong morale. Many organizational studies indicate employers that place a high level of importance and value in their employees are rewarded with loyalty from their staff.

So how does this all relate to boosting profitability?

Employees who are enthusiastic in their approach to each workday are likely to dedicate themselves to their company and work hard to see it succeed. Members who possess higher levels of morale take pride in their work and will do their utmost to ensure each task is done with a high degree of professionalism, resulting in higher quality work.

Staff members who have a good morale are also likely to be more productive, innovative and enthused as they approach their jobs. They also will probably feel a sense of ownership in the organization and, as a result, want to see it thrive. This drive equates to increased value, presence, and strength; all of which increase an organization's standing in the competitive market. In the end, it can boost profitability as well.

Ways negative morale hurts a company

If an employee, or group of employees, are consistently feeling down in the dumps and depressed in their jobs, they are more than likely not going to be as productive as they could be under better working conditions. Unfortunately, there are some managers and organizational cultures which foster low morale atmospheres through using threatening means as an attempt to increase productivity; this seldom brings in the results they desire. It might work for the short-term, but is probably not a good strategy for the long-term.

Think about it, if someone bullies you, are you going to respond positively? Or will you feel resentment? Employees who are working in oppressed or demeaning environments are likely not going to work hard, they'll probably meet minimum standards, but it is a lose-lose scenario. Employers could be getting more for their dollar and employees are miserable in their jobs and will probably end up seeking employment elsewhere. This is costly to a company because they are left with having to hire and train new staff, all of which will ultimately impact the bottom line.

Empty conference table
Credit: Keoni Cabral on Flickr/CC by 2.0 with Attribution

Fostering a negative environment will likely end up with employees deciding to leave.

Create a win-win environment

The best organizational approaches which are advantageous to everyone are to create and nurture a work environment which promotes a feeling of enthusiasm, appreciation and gives an overall feeling of positive vibes.

Staff members will develop confidence and experience growth in their jobs, further adding value to the company and they'll also look forward to each work day. This not only brings profitability to higher levels, but also results in excellent returns for the salary dollars paid out.

There are really no advantages to maintaining a work atmosphere full of negativity and low morale. After all, who does it really benefit? As a leader, which would you choose? Happy employees, higher percentages of productivity and higher profits, or "getting by" financially with a workplace full of dejected people who are meeting minimal requirements?

Motivational theories definitely have merit and value.  Good leaders not only consider these ideas, but finds ways to integrate them into their organizations.

Smiling business people
Credit: thetaxhaven on Flickr/CC by 2.0 with Attribution


Sep 12, 2015 12:37am
Useful post. Thanks a lot!
Sep 12, 2015 4:16am
Thanks very much hishama, glad you liked it and I appreciate your comment.
Sep 30, 2015 1:01pm
Very good and important info
Oct 2, 2015 4:28am
Thanks Tony for reading and commenting!
Nov 26, 2015 7:20pm
You are so right! I had a temp job once where, on my first day, I was smiling and happy to start my work day. A coworker frowned and said, " Don't let them see you smiling around here. They will think you are a goof-off."

So I am supposed to produce positive results feeling negative? From then on I became very sensitive to fear-based leadership. It is very demoralizing to treat an adult employee like a naughty 2-year old toddler.
Nov 28, 2015 2:49am
Totally agree (and what a welcome you got!), it's far more motivating in a positive environment. Thanks so much for sharing your experience and thoughts.
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  1. "Rebuilding Morale." Mindtools. 8/06/2015 <Web >
  2. Frederick F. Reichheld "Loyalty-Based Management." Harvard Business Review. 8/06/2015 <Web >
  3. "Employers must work hard to improve morale, productivity." The Star-Ledger. 8/06/2015 <Web >
  4. Amy Novotney "Boosting morale." American Psychological Association. 8/06/2015 <Web >

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