Keep an eye on morale to ensure your company is shipshape
By Jenny C. McCune • Bankrate.com

Low morale can sink your business faster than a torpedo, and in today's turbulent economic waters, it's something a small-business owner needs to address.

Layoffs, a loss of key accounts and other bad business news can sour employee attitudes, leading to a less-productive work force. Even worse, poor morale can prompt your best workers to abandon ship.

Here are ways to build morale and pilot your company smoothly through the business waters, no matter how violent they get.

Keep it in the family
Take a personal interest in your workers so they will take a personal interest in you and your business, says Jennifer White, chief executive office of JWC Group Inc., a Kansas City, Mo.-based executive coaching firm.

"As a small-business owner, treat your employees as family," White recommends. "You do things for your family that you wouldn't do for others. It's about building loyalty by showing that you care."

Leigh Branham, vice president of consulting services for Right Management Consultants, calls this "adopting a give-and-give-back philosophy."

"If you start from the premise of giving your employees something, rather than just trying to get something from them, they will stick with you during bad and good times," the Overland Park, Kan., human resources consultant says.

An informed employee is a happy employee
Sharing news -- good or bad -- is a good way to keep morale up, says Branham, author of Keeping the People Who Keep You in Business.

"People feel less victimized when they know what's going on," according to the consultant.

If your company has just lost a key client or has other bad financial news, it's far better to acknowledge the facts than to go into denial.

"In the absence of information, people will think the worst and very often their imaginations will imagine worse than what the actual reality is," Branham says.

Also brief employees about what's going on in your company before you go public with the news.

"You have to let employees know first rather than them reading it in the paper or on AOL or hearing it on the radio," says Cathy Rusinko, assistant professor of management at Philadelphia University.

"Employees need to hear from you that you need their help in figuring out how to create revenues or how to make cutbacks," says JWC's White.

Besides getting good ideas from those who best know your business -- your staff -- you'll be cultivating an environment of openness, which in turn promotes good morale, White says.

Conduct a morale audit
Even with small companies, it can be difficult to gauge employees' attitudes. Several clients of Right Management Consulting have employees fill out monthly questionnaires to determine morale levels.

Your company may not be large enough to require a formal questionnaire, but it's always a good idea to check in with workers, even if it's done informally, Branham says.

"Very often it's a whole lot of little problems that annoy employees and cause morale to slip," the HR consultant says. "Just asking them and fixing these little problems can do a lot to keep morale high."

According to a survey that Right Management recently conducted with 5,300 employees across the globe, only 50 percent said they felt that their employers truly cared for them.

"That shows that there is tremendous room for improvement and that your company can score if it can show that it cares," he says.

Let them go
If your company must let some employees go "be okay with that," White says. It's far better to lay off some less-than-productive staff than to keep everyone on payroll and end up destroying morale -- and your business.

In addition, it's best to try to do all the layoffs at once rather than spreading the pain across several months, Branham notes. Try to be honest about the need for layoffs, and explain how a work force reduction will better position your company to succeed.

If your company must fire workers, devise a strategy to keep survivors on board, says Philadelphia University's Rusinko.

"It's good to have a selective retention strategy hand-in-hand with layoffs," the college professor says.

The same goes for voluntary attrition plans. Do the best you can to ensure that the employees you lose through attrition aren't the ones you want to keep.

Although a small-business owner wants to encourage good employees to stay, it's important to stay honest. That means not making promises you can't keep, Rusinko says.

Instead of promising your VP of sales that he will never ever be laid off, tell him that you'll do everything you can to keep him on board.

Don't get buffaloed by your best employees
"Employees are shrewd," says Jennifer White, author of Drive Your People Wild Without Driving Them Crazy. "They will take advantage of a difficult situation and try to win concessions."

While you may need these workers, balance their demands with what your company can afford, White says.

"Never be handcuffed by your employees," recommends the business coach.

Finally, realize that even morale boosting has its limits.

Keep your own morale and that of your employees up by recognizing that no matter how hard you try, you'll never be able to keep all your employees satisfied.

"No matter what you do as a small business," says Rusinko, "you can't please everybody all the time."

Jenny C. McCune is a contributing editor based in Montana.

-- Posted: July 6, 2001