Business Issues: Low morale can carry high cost to bottom line

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Ask any successful small businessperson what their key to success has been, and you'll most likely get a variety of answers. |ret||ret||tab|

One important factor likely to be mentioned, especially in this period of low unemployment, is a dependable and productive employee. It's evident that people really do make a big difference in the success of any business. |ret||ret||tab|

Beyond possessing the skills necessary to do the job, most business owners or managers would say the secret to a productive workforce is an elusive thing called good morale. Good morale can be hard to define, but nevertheless it deserves your attention because it can definitely affect your bottom line. |ret||ret||tab|

Now, it's easy to see how a really great or a really lousy employee impacts your business. But most of your people fall somewhere in the middle. They may be anywhere within a wide spectrum of satisfaction or dissatisfaction. Watch for these symptoms of poor employee morale and be aware of the costs to you:|ret||ret||tab|

performance and productivity: In other words doing (or not doing) things that result in having to take time and effort to correct. The cost of poor employee performance, to a small business, can on average represent anywhere from 10 percent to 20 percent of sales.|ret||ret||tab|

This is a classic sign of low morale among employees and it can cost you big time in productivity, while other employees take up slack for lost co-workers. It can cost money, since you may have to pay the workers you have left overtime to keep things going until replacements are hired. It will also cost time. As the owner of the business you may be distracted from your regular duties to cover for former employees. It will also take time to recruit new help.|ret||ret||tab|

Loyalty: Though today the concept of company loyalty seems outdated to many, it remains very important to small businesses. Low morale can chip away at feelings of loyalty. Employees without a sense of loyalty to the company will more readily leave to pursue new skills, more money and more responsibility.|ret||ret||tab|

This can create disruptions in business, especially in small businesses with few employees. The cost, beyond having to pay someone that's not at work (if you offer sick leave benefits) may include lost productivity, overtime for other employees filling in, temps you may have to hire, and loss of business or dissatisfied customers.|ret||ret||tab|

To improve morale you must know what is important to your employees. In a recent study, employees were asked to rank 10 items in order of importance that they wanted from their jobs. Their employers were then asked to guess how they thought their employees would rank the same 10 items. The results showed that employees ranked interesting work as number one, with appreciation and recognition second, and feeling in on things third. Employers guessed that good wages would be number one, job security second, and promotion and growth third. Many business owners were surprised that employees ranked good wages fifth in importance.|ret||ret||tab|

These study results are actually good for small businesses because their employees often wear a lot of hats and so have more interesting jobs. Yet, as the study indicates, it's important for business owners and managers to consider the nature of the work being done in their businesses and the feelings of workers, and to take these "soft issues" very seriously. Pay becomes most important only when the employee perceives his or her wage is below industry standard. If the pay is in line, job satisfaction will hinge more on the soft issues.|ret||ret||tab|

If symptoms indicate that morale in your place of business is lower than it should be, you need to determine what aspects of the workplace are creating the dissatisfaction and then work to fix those problems. Strategies may include building employees' involvement in the business, building employees' self-esteem, and recognition and reward programs. Act now, before grumbling workers cost you more than you ever bargained for.|ret||ret||tab|

(Sonja Chasteen is the business assistance manager for the Springfield Area Chamber of Commerce.)[[In-content Ad]]