Body_EmployeeMorale.jpgby Iris Dorbian.


During tough economic times, when so many small businesses are slashing expenses by freezing salaries, laying off employees, or, the most dire, closing their doors forever, it can seem like a Herculean task to maintain employee morale. Just consider the numbers: In April, the U.S. Labor Department reported that the unemployment rate stood at 8.1 percent. Though that’s an improvement over September’s 9.1 percent, it’s still high enough to make workers question their job security. Managing in this kind of angst-producing environment is tough for small business owners. So, what smart strategies can entrepreneurs employ to boost employee engagement and increase company morale?

Personalize recognition

“Most people don’t leave a job for money,” says Michael Alter, president and CEO of SurePayroll, which provides online payroll resources to small business owners. “They leave because they don’t feel valued and they don’t like the boss.”


PQ_EmployeeMorale.jpgTo counter the perception of the boss as a monolithic figure who is either unavailable or unapproachable, Alter feels small business owners should fully capitalize on their company’s small size and personalize rewards to drive morale.


“For example, in a smaller company, if I know somebody is a NASCAR fan or loves the Rolling Stones, I can pay $500 and get them front row seats at NASCAR or tickets to the concert,” explains Alter, who launched his company in a Chicago suburb in 2000 with fewer than 10 employees. “They can take their spouse or friends and make it a personal experience. They’ll remember forever that their company or boss knew them well enough to [do that]. I think [that kind of personalized experience] is remembered a lot longer than if the employees were just given $500 that goes towards paying a credit card.”


At Betty Mills, a janitorial supplies company based in San Mateo, California, it’s not Rolling Stones tickets that rally the troops—it’s noisemakers.


“In our office we have a large brass mariner bell,” explains Victor Hanna, co-founder and CEO of the 10-year-old company that employees a staff of 30. “When a salesperson takes a large order, he or she rings the bell. [When that happens], everyone sounds off instruments at their desks, which include everything from Spanish maracas, flutes, and kazoos all the way up to a few blow horns. It’s almost like an instant mariachi band.”


After the revelry ebbs, the sales team then takes their turn spinning a prize wheel that has every employee’s name on it. Wherever it lands, that employee wins a cash prize. “That way the entire company gets to celebrate a success,” says Hanna. “On Fridays, I walk around with a green hat on and a fist-full of cash and hand it out to the winners. It's part of our culture and almost everyone goes home with some cash in their hand to make living a bit easier.”

Communicate regularly with staff

For small business owners who would rather not turn their space into a mini-Times Square on New Year’s Eve, there are other, quieter ways to help boost employee morale.


Susan Johnson, owner of the Minneapolis-based Rue 48 Hair Salon, which she opened three years ago, likes to check in with employees every 30 days. She uses these one-on-one meetings to not only evaluate where each employee is, but also to discuss how she would like to see them progress career-wise.


“It is a great opportunity to tell them what they are doing well and what I see when I work with them,” says Johnson. And unlike some employee/employer conferences that may devolve into passive-aggressive attacks and recrimination, Johnson says these confabs are always couched in the most positive terms. “I try not to focus on negative talk so I can rev them up to grow,” she notes.

Be transparent

When times are tough, some employers might want to mask the true depth of their company’s fiscal or operational disarray by pretending that everything is okay. Given how sophisticated employees are these days that would be a strategic error. Avoid “spin” say the experts. Tell your staffers the truth but don’t be a fatalist either. Remember: You want to keep morale up.


“Get it all out in the open,” advises Neil Ducoff, founder and CEO of Strategies, a business education and coaching company that works with salons and spas across the country. “Let people understand that you are aware of the problems and are working on it.”

The more information you can share with your employees, the better it will be in easing their worries and pre-empting the rumor mill, adds Ducoff, author of No-Compromise Leadership and Wake Up!

Think about the workforce you want to attract

If you want to elevate employee morale, make sure you hire workers who are a good fit for your company. Once you have the right team, design your rewards/benefits program to suit them specifically.


“If I’m trying to hire programmers who are younger and working crazy hours, then the amenities I want for that kind of workforce are going to be heavily caffeinated—coffee and sodas—available and free,” says Alter. “It’s going to be a very relaxed and open environment, maybe in a loft kind of space. However, if I’m trying to attract a more stable and conservative workforce, I might have a different kind of health insurance plan. I might have my summer party include families.”

Remember to say “thank you”

It’s only two simple words, but they mean a lot. Remembering to thank employees who are worried about their job security can go a long way toward boosting their confidence, and by extension, their performance.


“There’s such a desert of appreciation out there,” reflects Kevin Sheridan, senior vice president of HR optimization at Avatar HR Solutions, an organization that studies and surveys employee engagement. “We get employees in these focus groups who are quick to say if something goes wrong, the senior leaders and managers are all over them. People want to know from their boss that they’re appreciated, whether formal or informal. Some managers don’t have the time [to say thank you] or they don’t think of it. My advice to them is to put it on their calendar. Tell employees thank you and that you appreciate their work. That’s a best practice.”

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