Low morale can hit the bottom line

Even in the best of times, morale is a delicate, unpredictable thing. Will one employee sulk when another receives a promotion? Will a cancelled project throw a team into a tailspin of recrimination and apathy? Will a switch from lobster bisque to pea soup in the company cafeteria cost you your best worker? Threading your way through these problems can be like negotiating a minefield. At any moment, something can blow up in your face and send productivity tumbling even as your employees commence to mumbling and grumbling.

Of course, these are not the best of times.

It’s no secret that morale is an omnipresent issue right now – thanks to the sinking economy and resulting layoffs. Those cuts have forced the survivors, including those in IT, to shoulder more responsibilities even as their salaries and benefits fall under the cost-cutting axe.

Bad morale is insidious. Bad morale skulks, it lurks, it simmers just beneath the conversation at the watercooler. But if you keep your eyes and ears open, you’ll know when it’s there.

Morale is more than a people issue; it’s a business issue. Low morale increases turnover, and turnover (when unplanned) is bad for managers and their reputation, department and efficiency and, of course, the bottom line. Low morale also causes declines in productivity and quality. No figures exist to quantify those declines, said Anne Reustle, leader of the work-life consulting group at Mercer International Inc. in Philadelphia, but the correlation between morale and business functioning is self-evident.

“Stress and illness caused by excessive demands in work and personal life can seriously reduce a worker’s productivity and have a direct impact on the bottom line,” Reustle asserts.

Those demands are magnified in IT departments, where maintaining morale can be singularly challenging.

“Right now, IT’s workload is increasing because of layoffs, but at the same time their energy is ebbing and they feel overloaded and confused,” said Dennis LaRosee, senior vice-president of Praendex Inc., a Wellesley, Mass.-based executive training and management consultancy. “IT leaders and workers tend to be introspective and technical in nature. They feel unappreciated because no one sees the creative effort and energy that goes into writing an application or completing a project.” And when IT staffers do receive feedback, LaRosee points out, it’s usually negative.

Before the problem of morale can be tackled, a couple of ground rules need to be understood. There are no easy fixes or blanket solutions. Morale isn’t like a buggy software program – there are no service packs or patches. It can’t be fixed in one day or one week, and it won’t be solved by pizza parties, free mugs or wacky Hawaiian shirt day.

What you need to understand about morale is this: The mood of your employees can be brought down by external factors, such as the state of the economy, but it is your leadership skills or lack thereof that will tip the morale scales one way or the other. In tough times such as these, the people you are responsible for are looking for support, leadership and reassurance. If you ignore or underestimate that need, you’ll have a morale problem on your hands.

“Lack of communication and bad management, or lack of confidence in management, are the two biggest causes of low morale,” said Rick Chapman, CIO and chief administrative officer at Kindred Healthcare in Louisville, Ky. “It doesn’t matter what the economy is like.”

The first step toward fixing bad morale is acknowledging that the problem exists. The second step is realizing that it’s your responsibility to make it better. While morale may seem like the domain of HR, that’s a cop-out, said David Van De Voort, a principal consultant and leader of the IT workforce effectiveness group at Mercer.

“The CIO is the head of a community, a family of professionals,” he said. “No competent CIO would leave morale for HR to deal with. The CIO has to be the one who sets the tone and defines the IT culture in any organization.”

While IT managers should not relegate responsibility for morale to HR, you can and should lean on HR for help. Having an HR representative participate in meetings can help make employees feel cared for by the company. The HR rep is also another person an employee can talk to. No matter how open your culture, employees aren’t always comfortable talking to their managers, and that means they may not tell the whole truth about how they feel if they do talk to you.

There are, however, actions you can and must take to deal with and reverse a bad morale situation, including placing special emphasis on management basics such as communication, leadership and special programs for employees: training, rewards and recognition. Here are steps tailored for an IT staff that you can take toward recognizing and rehabilitating low morale.

Take nothing for granted

Morale is like the weather on the plains – it can change drastically in the space of a minute. But on the plains, you can see a storm coming; the warning signs of bad morale are more subtle and difficult to detect. Some old signals, such as increased turnover and frequent absences, aren’t as reliable now as they once were. People are less likely to leave their position in the middle of a recession, when jobs are hard to find, and since Sept. 11 some companies have discovered that turnover has decreased as employees yearn for stability and security in their life.

Still, being able to identify a morale problem begins by being able to recognize situations that can bring people down, said Ben Holder.

As vice-president and CIO of Unifi Inc., a Greensboro, N.C.-based textiles manufacturer, he keeps his ears open for the red flags that could signal trouble.

“The biggest mistake you can make is to ignore the existence of a problem or rationalize it away,” he said. “People shouldn’t be constantly uncommunicative. If they get negative in conversations, you have to perk up your ears. Look at their faces. Are they laughing or smiling at all around the office? Are they quiet in meetings? If behaviour and attitudes have changed, red lights should start flashing in your mind.”

Having daily contact with staff is essential for maintaining morale, said Theresa Welbourne, associate professor of organization behaviour and human resource management at the University of Michigan business school in Ann Arbor, Mich. “No organization is good at being proactive when it comes to morale,” Welbourne said. “Most companies are reactive.”

A manager’s first line of defence when it comes to low morale is to listen closely, she explained. The clues lie in what employees are not saying.

“Look at the level of energy,” she said. “Is your staff engaged and participating in projects and meetings, or are they withdrawn and lethargic? If people are no longer contributing, particularly if they used to speak up often, that’s a sign. If people are talking but are being pessimistic, that’s very telling. When things are good, IT workers feel like they can do anything. But when morale is down, they tend to feel like even one project is too much to get done. The sense of urgency on projects diminishes.”

The best way to counteract that kind of wariness is to talk to your staff in a consistent, honest manner.

The most important tool for recognizing and combating bad morale is communication. Even if your company is going down the tubes and the future looks grim, tell your staff what’s really going on, said Joseph Osbourne, CIO and executive vice president of Tech Data Corp., an IT products and logistics management company based in Clearwater, Fla.

“The biggest mistake is to withdraw and keep information to yourself,” Osbourne said.