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Employee Morale

Written on September 22, 2011 at 6:29 pm, by HRDyn

Many business owners and managers are noticing the morale, enthusiasm and engagement of their employees has been declining, mainly due to the tough economy of the last 3 years.

In working with our clients, HR Dynamics has come to believe that there are two important factors causing this decrease in morale.

  1. Downsizing – Because of the economic downturn, many companies' existing employees feel overworked, under appreciated and stressed; and there seems to be no end in sight.
  2. New Hires – In this current environment, if a company hires a new employee, the existing staff expects the new employee to make an immediate and noticeable contribution (“after all, as an existing employee I have been denied salary increases or bonuses for the last couple of years, so why not give me a raise instead of hiring the new person”).

These two factors require new thinking in order to motivate existing employees and make the right new hire choices.

To make good hiring decisions, a company should have a step by step hiring process which includes consistent interviewing techniques and reference checks. Additionally, a “try before you buy” approach can greatly improve the odds of making a successful hire.

Using an employment agency, the new “hire” can be a temporary worker, usually for 2 to 3 months, and then converted to permanent employment if the try-out period is successful. During the try-out period the employment agency is responsible for all statutory benefits such as workers compensation and unemployment insurance. If the try-out period is not successful, the “hire” is turned back to the agency eliminating the company's obligation for unemployment insurance or severance.

For existing employees, the issues are morale and retention. Two solutions to solve these issues are …

New Training Concepts and Incentive/Recognition Programs.

Training can make existing employees feel more engaged – more part of the business. Also, everyone enjoys learning new skills that allow them to be more efficient and productive in their work. An important CAVEAT!... the new training programs must be relevant and custom designed to fit the needs of the individual company – not something pulled off the shelf.

The right incentive and recognition programs are excellent morale builders. They need not always be cash bonuses. A day off with pay, flex-time, dinner for two, gas cards, movie tickets, etc. show appreciation for hard work and reward workers by giving them something they want. Recognition in the form of “Employee of the Month” programs instill pride in employees and create a little friendly competition. Design programs that are specific to the company's goals for the biggest overall impact.

Also, benefits such as health care and disability insurance certainly have a cost, but compared to a salary increase might be more valued and improve employee retention.

When will this economy turn around? I don't think anyone knows, so we better learn to operate our businesses in the environment of a struggling economy.

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