How Leaders Impact Employee Morale – and the Bottom Line

A lack of employee engagement is threatening economic recovery. Here, organizational leadership must set the tone.

At the end of every calendar year, The Conference Board research group conducts a yearly job survey to measure job satisfaction. Results from 2009 were more than disappointing. Only 45 percent of Americans reported being satisfied with their work — the lowest level recorded by The Conference Board in more than 20 years. According to Scott Hunter, president of consultancy The Hunter Partnership Alliance, this year’s results will likely not be any more optimistic.

“It gets worse every year,” Hunter said. “The success of a company is a function of the mood of the company, and most people that run companies don’t understand that. They’re so busy getting the product out, getting the service out, making money, that they forget to take care of their most precious asset — their people.”

According to Hunter, the drop in workers’ contentment can be partly blamed on the worst recession since the 1930s, as well as on managers worrying too much about this economic downturn and not enough about their employees.

“It’s the saddest thing seeing how many people are sitting around waiting for the economy to improve rather than understanding that they hold the keys to their own success,” Hunter said. “A company is a collection of human beings, and the results a company produces are a function of what the human beings are all about.”

As the effects of the recent recession continue to be felt, American businesses are losing billions of dollars in turnover, lack of creativity, stress-related health claims and absenteeism from employees. As employees become progressively more anxious about job security and financial uncertainties, they want managers to acknowledge the impact this recession has had on them personally and appreciate their commitment and work.

“We were born into a world which has people focused on themselves and not on other people,” Hunter said. “We have this ego voice, and the ego voice takes care of you.”

According to the Small Business Administration, 90 percent of businesses fail in the first 10 years due to a lack of fundamental principles, one of these being a lack of soft skills from a manager. Creating and maintaining an effective culture of commitment and engagement takes effort from leaders who work closely with employees, and that’s too often being neglected. In The Conference Board’s study, 51 percent of respondents said they were satisfied with their boss. That’s down from 55 percent in 2008 and around 60 percent two decades ago.

“We’re not a human doing, we’re a human being,” Hunter said. “It’s the compassion, the appreciation, the desire to take care of people and empower people. You can call that skills if you want, but I prefer to just call it a way of being. Managers don’t acknowledge people for what they do that they like, and they beat people up for the things that they do that they don’t like. They spend their time criticizing people rather than acknowledging them.”

Businesses need to be receptive to developing new tactics that acknowledge employees as appreciated individuals because old methods have not been working. According to a new report from research firm the Economist Intelligence Unit, sponsored by consultancy Hay Group, 84 percent of top executives believe disengaged employees are one of the three biggest threats facing their business. Engaged employees, those who are fully involved and passionate about work, find their jobs interesting and thus are more likely to be innovative and take the calculated risks and initiatives that drive efficiency toward economic growth.

“Leaders need to work on creating excitement and enthusiasm,” Hunter said. “Be clear about the future you want to create. Be clear about what’s in it for everybody in the company. Build a sense of team. Have people feel like they’re a part of what’s going on; include them; have them feel acknowledged and appreciated. When you do that, that’s the formula for success.”

Ladan Nikravan is associate editor at MediaTec Publishing. She can be reached at