Why Employee Morale and Productivity Matter | Wrike

Employee morale directly impacts employee engagement, which ties straight into their level of productivity. According to one Gallup report, disengaged employees cost US businesses up to $550 billion a year from lost productivity.

By understanding how employee morale and productivity are linked — and knowing how to accurately measure morale — you can better impact the overall attitude and engagement of your team and boost their productivity.

How employee morale and productivity are intertwined

Morale refers to someone’s emotional and mental state. It can also refer to an individual’s or a groups’ sense of purpose and level of confidence regarding future outcomes.

When we talk about morale at work, we’re referring to how your team members feel about the business, the work they do, and their place in the company.

Many research studies have been conducted across various locations, industries, and demographics to discover if there is a link between employee morale and productivity. Several studies indicate that morale can be directly tied to productivity.

Results also show that employee engagement directly impacts productivity, and morale is a significant factor in an employee’s level of engagement. Many of the factors that affect engagement, such as empowering employees, building bonds with other employees and leaders, and providing rewards and recognition, also impact morale.

This link between morale and engagement means that boosting employee morale can directly and indirectly increase productivity.

How to measure employee morale

Understanding the link between employee morale and productivity is only the first step toward improving employee and team performance. The next step is determining how to measure employee morale so that you can understand the current state of your team and track changes in morale over time.

One of the best ways to measure morale is through employee surveys. For the best results, make the surveys anonymous, have them completed routinely, and ask very specific questions that employees can answer by choosing a ranking from 1–5 or 1–10.

Some examples of survey questions are:

Are you happy and fulfilled in your current position?
Do you believe your hard work and effort is recognized?
Do you feel there is room to grow in your job?
How likely are you to stay with the company?

Another option for measuring employee morale is to conduct one-on-one interviews on a regular basis. You can also assess morale by tracking symptoms, such as:

Changes in productivity
Changes in tardiness or absenteeism rates
Changes in employee turnover rates

What causes low employee morale?

If you discover employee morale is low or seems to be decreasing, it’s important you find out why. After all, if a specific problem is killing morale, any solutions that don’t address that problem are unlikely to help.

Some common causes of low employee morale are:

Poor leadership. While it’s difficult to accept that you might be the problem, often, issues start at the top. Nearly 1/3 of employees think their current boss is a lousy manager, and roughly half have left a job because of a bad boss.
Unclear expectations. If employees aren’t sure that they’re doing what is expected of them, it will hurt morale. Sadly, only half of employees report that they know what’s expected of them at work.
Lack of rewards. Employees want to be rewarded for their work. When there are no rewards or incentives, they can feel their effort isn’t being recognized, which will kill their morale.
Criticisms and punishments. If employees are punished for mistakes, or even if they fear retribution for potential errors, it can ruin their confidence. Keep in mind that taking away a previous benefit, like canceling casual Fridays, can also feel like a punishment.
Negative coworkers. Unfortunately, one negative team member can quickly drag down the rest. If someone is frequently worrying or complaining, their low morale can rub off on the other employees.
Fear of the unknown. As we discussed early, morale encompasses an employee’s outlook of the future. If they have reason to worry that their future isn’t secure, it will erode their morale. For instance, office gossip about the company losing money or potential layoffs will often damage morale.

How to improve employee morale

Removing any direct causes of low morale should help improve employee satisfaction and happiness at work. Here are some additional actions you can take to increase employee morale and productivity:

Touch base regularly. Showing you care about your employee’s mental state can help improve morale. Regular one-on-ones can not only help you assess morale, but they can also help your employees feel like you’re interested in their well-being and development.
Be transparent. Reports show that 70% of employees say they’re most engaged when senior leadership continually updates and communicates company strategy. Using objectives and key results (OKRs) can help your team see the larger picture and how their work fits into it.
Celebrate. Celebrating big and small accomplishments helps your team feel recognized and appreciated for their hard work. Celebrating non-work events like birthdays can also help promote team bonding and make employees happier.
Emphasize work-life balance. Less time spent at work can make employees feel happier and more relaxed. It can also boost their productivity.
Include your team in decisions. If employees don’t feel that they’re being considered in the decision-making process, it will make them feel undervalued and powerless.
Reward employees. Teams and individuals should be rewarded for their hard work and commitment. Whether the reward is public recognition of work well done or a gift card to their favorite restaurant, regularly rewarding employees helps increase morale.
Encourage feedback. Asking for honest feedback, responding positively, and addressing issues will increase your team’s happiness and their faith that you’re in their corner and want to help them succeed.
Promote team bonding. Planning team events outside of work hours can help build a sense of belonging and unity that can, in turn, boost morale. Even remote teams can use tools like Zoom to participate in virtual team building activities.

Did you know that the tools you choose to use can play a significant role in your team’s morale? That's why employee productivity tracking is important.

The right work management and collaboration tools can help you measure and promote employee morale in a variety of ways.

For instance, chat features can increase communication and team bonding, while task lists can improve individuals’ understanding of what’s expected of them. Plus, project-wide dashboards can increase transparency and people’s understanding of how their work fits into the bigger picture.