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5 Ways to Boost Employee Morale (Without Giving Raises)

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As a small business owner, your employees are among your most valuable assets, and creating a culture where they feel engaged and motivated to work hard should be at the top of your priority list.

Employee engagement in the U.S. is on the rise, as a 2018 Gallup report showed 34% of employees feel enthusiastic about their work and committed to their workplace, tying the highest percentage in Gallup’s history. Just 13% of employees feel “actively disengaged” and miserable at work, which is the lowest Gallup has recorded. But despite the hopeful findings, most people – 53% – report feeling “not engaged” at all with no emotional connection to their workplace.

“The vast majority of workers are not engaged,” said Judith Bardwick, author, executive coach and business consultant. “It means they don’t care, but they will keep up face so they don’t lose the position they have or the money they’re getting.”

The profitability of a business, whether small or large, is directly linked to how many people in the organization feel their work is worthwhile and are committed to the company, Bardwick said. If employee morale sinks too low, you risk the threat of disgruntled workers setting out to sabotage the business, she said.

Workplace turnover can also be costly — employers are expected to pay more than $680 billion in turnover costs by 2020.

You may want to give monetary bonuses as a quick way to boost employee morale and engagement, but that rarely has the desired effect, Bardwick said. One-time bonuses and physical gifts of any kind tend to make employees “feel they are being bought and not applauded as an individual,” she said. If people start comparing their gifts, it could create additional tension in the workplace.

Throwing money at a morale problem may not be the best solution. And perks will do little good if an unhealthy work culture is the real culprit. Here are other ways to boost morale in your business — and (most of them) don’t cost a dime.

5 ways to boost employee morale

1. Encourage open dialogue.

When morale is high in a small business, employees tend to feel comfortable speaking openly to the owner, said Flip Brown, owner of Business Culture Consultants. Employees should feel they can share both positive and negative thoughts about the business with you.

If they think there’s a problem within their team or with the business operations, employees should be able to come directly to you, he said. If they think you don’t want to hear it, they’ll likely begin gossiping with other employees. It may not always be easy to hear what employees have to say, Brown said, but it’s important their voices are heard.

2. Establish rapport with employees.

Having casual conversations with employees can go a long way in making them feel valued within the organization, according to Bardwick. You should take some time to get to know each employee, taking an interest in their personal life and their experience at work. You should ask what they think about their work and if they have ideas to share without making them feel like they’re being judged, she said.

Creating a relationship with your employees will also help you to stay in the loop if employees become unhappy and morale starts to slip, Bardwick said.

“Trust is the key to people opening up and being truthful,” she said.

3. Give individual rewards.

Getting to know your employees would allow you to reward them in meaningful ways. For instance, if an employee has two small children at home, you could offer him or her a flexible schedule or childcare options, Bardwick said.

If you know someone is in a tight financial position at home, a cash bonus may be an appropriate reward in this instance, she said. Knowing employees’ individual needs and wants would help you avoid giving impersonal gifts that may go unappreciated.

4. Give praise.

People want praise that they have earned, said Bardwick. Employees want to feel that they’ve earned compliments or acclaim through their efforts, rather than praise that’s generalized and empty.

“Sometimes it’s enough to say, ‘You know, you did a superb job of making those notes into an elegant pamphlet,’” she said.

5. Bring in outside help.

To assess the morale in your workplace, you could hire a business consultant to gauge how employees feel about the business, said Brown. They may feel more comfortable sharing honest feedback with an impartial third party.

You may find out that employee morale is higher than you expected. But oftentimes, business owners grow distant from their employees over time and there’s a gap between how you think people feel and how they actually feel, he said. A consultant can help you create a strategy to make change within your organization.

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Morale mistakes to avoid

Once you have three or four people on staff, you’ve got the beginnings of workplace culture, Brown said, and you should be aware of how everyone works together. Most small business owners don’t examine the culture until later down the road or when problems arise, but you should keep it mind from the start, he said.

“If you have a morale problem in your business, it’s really going to take six to 12 months to turn that around,” he said. “There are no quick fixes.”

To keep employee morale on track, avoid these missteps:

Hosting team-building events without setting goals.

Team-building events or offsite retreats can be fun, but they’re a waste of money if no results follow, Brown said. You might enjoy seeing everyone get along outside the office, but people will probably fall back into old patterns after returning to work. You need to put a plan in place to create behavior change within the workplace if that’s your ultimate goal, he said.

“What you want six months later is for employees to say, ‘That was a turning point for us,’” Brown said.

Being indirect with problem employees.

Business owners often have a subconscious tendency to spend time with high-performing employees, rather than those who are struggling or causing problems, Brown said. The hope is that those people will realize on their own that they need to make a change, but that doesn’t usually happen.

As the owner, you should be direct with employees and be clear about your expectations, Brown said. You need to give them the means to figure out if the company is a good fit for them or not. In some cases, you may need to let them go. Keeping someone around who doesn’t benefit the business could drag down the morale of the whole team, Brown said.

Not setting good examples.

Employees tend to watch those in management positions for behavior cues in the workplace, Brown said. If you or any managers are not taking the time to listen to employees or form relationships throughout the company, employees won’t feel valued and morale will likely drop.

“If you have patterns of unhelpful or dysfunctional behaviors that aren’t being addressed, it kind of doesn’t matter what you do,” Brown said.

High workplace morale is something business owners need to work toward and make a real effort to achieve, Brown said. It won’t happen overnight, but your persistence will pay off.

“To have good employee morale in small business, everybody, including the owner, has to be committed to becoming better people,” Brown said.


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