Running Head: IMPROVING MORALE 1
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Improving Employee Morale: The Importance of Relationships in the Workplace
Gwen Knight
Southern Utah University
Professor David McGuire
Human Resource Management
PADM 6500-701

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Running Head: IMPROVING MORALE
Abstract
The correlation between employee morale and productivity motivates organizations to
develop strategies and incentives to boost morale. The recession of 2008 has affected employee
engagement. It has been suggested that incentives and rewards be used to boost morale and
reengage employees; however, there are some indications that these strategies are not always
effective. A close relationship between a supervisor and employee is identified as having the
greatest impact on morale in the workplace. The responsibility for developing these relationships
rests upon the supervisor who must be trained and motivated to engage with employees. If these
relationships are successfully created, both morale and productivity will increase.

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Running Head: IMPROVING MORALE
A great deal of literature exists addressing employee morale. The general consensus of
this literature is that there is a strong correlation between morale and productivity. This
correlation motivates organizations to develop strategies and incentives to improve morale in an
effort to improve productivity. What strategies or incentives have the greatest impact on morale
in the workplace? The answer to this question may provide valuable insight to managers in
organizations as they work towards developing a productive and satisfying work environment.
Morale can be defined as the degree to which an employee feels good about work and
work environment (McKnight, Ahmad and Schroeder, 2001). In a study by Pestonjee and Singh
(1977), morale is defined more concisely as an attitude based upon workers’ faith in fairness as it
pertains to employers’ behavior and policies, the adequacy of direct leadership, a sense of
organizational participation and a general belief that the organization is worth working for. In
other words, employees with high morale feel engaged with their jobs and with the organizations
for whom they work.
Employees have been confronted by turbulence in the workplace since the beginning of
the Recession in 2008 (White, 2013). Upper management looked for ways to cut costs as well as
deal with rapid succession in advancement of technology and a quickly changing global
marketplace. Employees became stressed concerning the unpredictability in their workplaces
and the security of their jobs. This resulted in a decrease in employees’ sense of loyalty and
investment with their jobs. This disconnect was recognized by human resource professionals as
employee productivity and retention decreased. In addition, poor employee attitudes and
absenteeism increased (White, 2013). A Gallup survey conducted in 2013 confirmed that this
disconnect continues. The survey indicates that only 30 percent of workers in the United States
are actively engaged with their jobs (Gallup, 2013).

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Running Head: IMPROVING MORALE
Incentives or rewards and recognitions appear to be one solution for improving
engagement, thus improving morale. The need for incentives to improve morale seem to
increase in times of tight resources and cutback managements (Greiner, 1986). Greiner (1986)
examined these issues as they pertain to government and found that tough economic times
contribute to a reduction or delay of investments needed to maintain human capital. This results
in less training, deterioration of salary levels and other reward systems and few opportunities for
career growth. These factors also contribute to employee disengagement. Employees decide
that they will cut their losses by reducing their contributions to their work. Research in the
private sector as well as the public sector has shown that effectiveness of monetary incentives in
stimulating performance decreases with the size of the incentive group. The implementation of
individual incentives seems most effective, followed by group incentives. Organization wide
incentives appear to be the least effective (Greiner, 1986).
Most organizations believe in the power of incentives to increase morale. A reward
system is based on behaviorist theory or observable behavior that occurs in response to a
stimulus. Examples of employee incentives/rewards/recognition include bonuses, stock options,
gift cards, plaques, vacations, banquets, and special privileges. According to Kohn (1993),
research suggests that rewards are only successful at achieving temporary compliance: they do
not change attitudes and behaviors or evoke lasting commitment. When the rewards end, people
revert to their previous behaviors (Kohn, 1993).
Incentives may actually have a negative impact on morale. Kohn (1993) purports that
rewards can cause employees to feel manipulated. Managers manipulate employees by making a
highly desired reward contingent upon certain behaviors. If employees are expecting a reward,
and then do not receive it, they may feel that they are being punished (Kohn, 1993).

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Running Head: IMPROVING MORALE
Manipulation, control and punishment do not appear to be factors that would contribute to
building morale in employees; therefore, if incentives in the workplace are evoking these factors,
then they may not be successful in boosting morale.
Rewards and recognition can also damage relationships in the workplace by causing
employees to compete against each other (Kohn, 1993). This competition destroys cooperation.
For every one person that wins, there are many who loose. A limited number of incentives
causes employees to see each other as obstacles to their own success (Kohn, 1993).
Research suggests that employees value relationships in the workplace and that these
relationships may be the most important factor to increasing morale. In a study conducted by
McKnight et al (2001) computer operations professionals in a large corporation in the travel
industry were interviewed. When asked about what impacted morale, the operators frequently
discussed the relationship closeness that they felt to their manager. These employees valued a
close relationship between management and employees and felt motivated when efforts were
made by management to build relationships and treat employees as equals. The study also found
that based on the close relationship, managers were more successful in the areas of autonomy,
feedback, and incentive controls. Relationships with employees can be strengthened when
managers frequently interact with employees face to face, remove structural barriers that create
social distance between management and workers and share strategies and plans with employees
(McKnight, et al, 2001). Greiner (1986) added that the key to sustaining motivation programs is
visible commitment and support from management. Incentive programs are fragile management
initiatives. They must be nurtured and supported by managers in order to improve productivity
and renew human capital (Greiner, 1986).

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Running Head: IMPROVING MORALE
Several other studies support the importance of relationships to morale. Pestonjee and
Singh (1977) found that the behavior of supervisors exerted an influence on worker morale.
Workers managed by supervisors who were employee oriented were found to have higher
morale, while those working for production-oriented supervisors exhibited lower morale. A
human relations management style by an immediate supervisor resulted in enhanced job
satisfaction as well as better production. The result of this study suggested that supervisors
should be trained not only to perform technical duties, but also in the area of human relations
(Pestonjee and Singh, 1977).
Corey (1973) also espoused the importance of relationships as contributing to morale. He
identified the manager as the person responsible for developing good morale. He suggested that
managers, no matter what their management level need to understand human relationships. They
gain this understanding of people through training and practice. Supervisory competence is
demonstrated when managers not only understand factors that motivate individuals, but also
display confidence and respect for their employees (Corey, 1973). Again, communication was
seen as vital to developing relationships. Corey (1973) cautioned that managers must be aware
of views and attitudes of employees in order to establish full communication. This is sometimes
more difficult in large organizations where employees do not know top management. It then
becomes the responsibility of the immediate supervisor to communicate with upper management
in order for the employee’s voice to be heard. Another responsibility of management is that of
motivating employees by providing challenging jobs for which they are qualified, and jobs that
can be performed effectively and lead to increasing responsibility. Training engages employees
and causes them to feel that a personal interest is taken in their development and results in better
attitudes towards supervisors (Corey, 1973).

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Running Head: IMPROVING MORALE
Good relationships between co-workers are also important (Corey, 1973). A worker’s
status in his/her group may not be determined entirely by the employer. When management
witnesses prejudice or maltreatment, corrective action should be taken. Positive actions to
encourage workers to develop better understanding by becoming better acquainted helps reduce
resentment and increases morale (Corey, 1973).
Coworkers and immediate supervisors influence how employees relate to and feel about
their organizations (Colan, 2009). Individuals in their work lives have a need for intimacy by
being connected to those around them. Lack of a connection to others causes disengagement.
Employees who share common direction and sense of community achieve their goals more
quickly and easily. Colan (2009) suggested that one strategy for meeting employees’ needs for
intimacy and improving morale is to create rituals and celebrations. Managers that are true
leaders make it a priority to establish rituals. These rituals can be created around hiring,
recognitions, productivity, innovation, promotions, volunteering in the community, etc. Events
that foster intimacy, belonging and fun are suggested as ways to boost morale (Colan, 2009).
Retention of employees and boosting morale can be increased by showing appreciation
for employee effort, commitment and enthusiasm. It also helps employees feel connected and
valued and strengthens relationships. Cash bonuses and gift cards are often used to acknowledge
contributions, but are not powerful enough to engage employees because they are not visible or
personal and do not tend to build relationships. Face to face interaction is important in a high
tech world (Colan, 2009).
Based upon this research, close relationships between supervisors and employees do
seem to be the most important factor contributing to employee morale. The assumption is that
supervisors/managers have been properly trained and have developed the necessary skills to

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Running Head: IMPROVING MORALE
create and sustain these relationships. Even if they have the capacities, they may not have the
motivation to engage. Pater (2013) cites some reasons as to why managers, who are leaders in
their organizations disengage. He describes these as ADD: arrogance, distraction, and
disconnection (Pater, 2013). Arrogance involves thinking by the manager that he/she is infallible
and smarter than everyone else. This leads to underestimating others and overestimating that
managers have all the right answers. Distraction is a loss of focus. Disregarding feedback,
making unrealistic plans, and lack of concern for others’ work progress are all signs of
distraction. Disconnection can destroy trust because managers may talk as if they are experts
about topics that they really know nothing about. Disconnection also involves not being
“present”, not seeming to care, and not looking after employees’ best interests (Pater, 2013).
Overcoming arrogance, distraction, and disconnection requires self- monitoring and
control over one’s mindset, focus on the big picture, and increasing contact with employees
(Pater, 2013). Training managers how to engage, self-monitor, and self-correct is recommended
in order for them to successfully create and maintain close relationships with employees. Failure
to do so will directly impact the vital relationship with employees shown to be the most
important factor contributing to morale.
In conclusion, economic issues since 2008 have contributed to a lack of engagement by
employees and a reduction in morale. One strategy for counteracting this issue is for
organizations to provide incentives, rewards, and recognition. There is some debate as to the
effectiveness of this strategy because these incentives may be interpreted as manipulative,
controlling, and punishing and can even damage relationships between co-workers. Research
suggests that close employee relationships with managers and supervisors is vital to boosting
morale. Many suggestions for developing this relationship have been examined including

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Running Head: IMPROVING MORALE
communicating by interacting with employees face to face, providing them with training and
opportunities to advance, showing respect and confidence in them, sharing strategies and plans,
developing a sense of community, creating rituals, and expressing appreciation. Training
managers to be employee-oriented in order to build close relationships is vital to increasing
engagement and boosting morale and will result in higher productivity. Further research
resulting in the development of best practice regarding managerial training in human relations is
recommended.

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Running Head: IMPROVING MORALE
References
Colan, L. (2009). The Emotional Side: Engaging the Heart. In Engaging the Hearts and Minds of
All Your Employees (pp. 125-152). New York: McGraw Hill.
Corey, John B.W. (1973, January).Motivating Employees. Journal (American Water Works
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http://www.jstor.org.proxy.li.suu.edu:2048/stable/41267175.
Gallup. (2013). State of the U.S. Workplace: Employee Engagement insights for U.S. Business
Leaders. Washington D.C. Gallup, Inc.
Greiner, J. (1986). Motivations Programs and Productivity Improvement in Times of Limited
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McKnight, D.H., Ahmad, S. & Schroeder, R.G. (2001, Winter) When Do Feedback, Incentive
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work/ar/1.
Pater, R. (2013). Overcoming Leadership ADD. Professional Safety, 58(11), 30-32.
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Of Occupational Psychology, 50(2). 85-91
White, S. (2013, September 1). Rewards & Recognition: 2014 Trends Report. Retrieved
November 18, 2014, from http://www.slideshare.net/imsosarah/2014-trends-report-rewards-and-
recognition.

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Running Head: IMPROVING MORALE