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Morale is the esprit de corps inside organization and is a product of

satisfaction with work done, sense of personal worth, identification with the
group, pride in the organization, general satisfaction with remuneration and
benefits (Monk, 1998). Therefore, morale is vital to organizational success as
it affects employee performance and productivity, which in turn affect
individual and organizational objectives.

Literature Review

Morale has been defined by Beach (Monk, 1998) as the total satisfaction a
person derives from his/her job, working group, boss, the organization and
environment. It is also affected by his/her personality structure. Morale
pertains to the general feeling of well-being satisfaction and happiness of
people. Morale can vary from positive (high) and negative (low), but never
absent (George, 1985). Effective managers need to exert their energies to
understand factors influencing morale, the impact of morale on productivity,
constantly monitor indicators of low morale and identify ways to build or
maintain morale (Figure 1).
2.1 Factors Influence Morale in Workplace
Understanding the factors influencing morale can help the management to
develop ways to maintain high morale. It can be identified as external and
internal factors (Figure 2):
External factors are influences outside the organization that are beyond the
managements control, such as employees family relationships, problems with
friends, etc (Hilgert et al, 1995). The factors may significantly affect
employees morale and hence, effective managers should alert to their
existence and do whatever possible (like counseling with empathetic listening)
to reduce the impact.

Internal factors involve supervision and management aspects, which are

more complicated as they are associated with morale to the degree of which
individuals identify with the goals of the organization (Costley and Todd,

Managers general approach to supervision and leadership style directly
affects employees morale. McGregors theory (Schermerhorn, 1996) in
Table 1 indicates that managers with Theory X assumptions tend to be overly
directive and control oriented, which create passive, dependent, and
reluctant subordinates with low morale. In contrast, managers with Theory
Y perspectives give subordinates more participation, freedom, and
responsibility to satisfy their self-esteem, self-actualization needs and selffulfilling prophesy that foster high morale. Therefore, good morale is based
on managers ability of delegation, empowerment and communication.
Theory X assumes people:

Theory Y assumes people:

dislike work

lack ambition


are irresponsible

are resistant to change

are willing to accept


prefer to be led rather than to lead


are willing to work





are capable




(Source: Schermerhorn, John (1996), Management, fifth edition, John Wiley
& Sons, Inc, Canada, p 35)
Managers general attitude and behavior in day-to-day relationships also have a
significant influence on employees morale (George, 1985; Hilgert et al, 1995). If
managers show negative attitudes (like suspicious, worry, or lose temper), employees
tend to follow suit and low morale will likely result. Conversely, if managers show

positive attitude (like confidence in work), this reinforces their positive outlook and
creates high morale.

Managers skill at human relations has a direct bearing on employees

morale (George and Cole, 1992). Good morale can only be encouraged
through work environment with good human relations, respect and
recognition for individuals, good communication and counseling.
High morale cannot be ordered, but it can be fostered by conditions in the
workplace that are favorable to its development (Hilgert et al, 1995).
Employees morale is inspired by motivation. Herzberg's Two-factor Theory
(Figure 3) indicates that motivators determine job satisfaction and
performance while hygiene factors do not motivate but their absence can
result in job dissatisfaction (Stone, 1998).

Good morale depends on

managements sensitivity to correct hygiene factors (like pay, working

conditions, interpersonal relations, supervision, company policy and
administration) and build motivators (like recognition, intrinsic interest in
the work, responsibility and advancement) in the organization.
Workplace climate is one key aspect influencing morale (George and Cole,
1992). A trust, open communication, friendly and vitality workplace can
affect morale and help employees to feel more satisfied in their jobs. Good
morale can be fostered through strategic communications to share
organizational goals and expectations with employees (MacDonald, 1999;
Belilos, 1999).

Poor morale occurs when employees are insecure and

doubtful for organizational goals due to lack of open communication and

2.2 Impact of Morale on Productivity

Davis (Frunzi and Savini, 1997) points out that there is not always a positive
correlation between morale and productivity (Figure 4).

However many

substantial evidences show that in the long run high-producing employees do

tend to have high morale.

High morale puts employees in a frame of mind to be productive and in a

burning desire to achieve and seek increased responsibility (Hilgert et al,
1995). Employees are willing to cooperative, loyalty, voluntary discipline,
initiative-interest, and pride in organization. These distinctive features
make employees satisfying in their position, have confidence in their ability,
and work with enthusiasm to meet the organizations strategic business
Unfortunately low morale is detrimental to the health, vitality, and productivity of
the organization (Frunzi and Savini, 1997). When it is present, employees feel that
their professional lives have little worth or meaning. Boredom, frustration, passive or
openly hostile set in, and employees experience a feeling of hopelessness to change
existing circumstances.
2.3 Indicators of Low Morale

Indicators of low morale can be a thermometer to measure organizational

ineffectiveness (Monk, 1998). Table 2 has identified indicators of low
morale (George and Cole, 1992; Weiss, 1998).

High labor turnover

No respect for


Low regard for the

Excessive sick leaves


Low productivity


Breaches of discipline


Excessive waste


Excessive absenteeism


Large number of



Large number of


Loss of interest and

Requests for transfers


General lack of
Poor quality of


Change in attitudes



Table 2: Indicators of low morale

2.4 Ways to Build Morale

Bringing and maintaining morale to a high level is a continuous process and

cannot be achieved simply through short-run devices so prevention for low
morale is important (Hilgert et al, 1995; Betts, 1989). Morale varies day to
day and it is contagious in both directions because both favorable and
unfavorable attitudes spread rapidly among employees (George 1985). It
should be a priority concern to develop and maintain employees morale at
as high level as possible without sacrificing organizational objectives.
Figure 5 suggests some ways in which managers can build morale.
Firstly, managers should show their involvement and concern by investing a
significant amount of time in advising, counseling, coaching, training and
listening to their employees, in which to ensure employees are clearly
aware of organizational goals and expectations (NcNamara, 1999).
Secondly, managers should create corporate culture and supportive work
environment by effective human resources strategies (Belilos, 1999). It
includes positive discipline, fair and just treatment to all, clearing defined
policies, career and personal development training programs, comfortable
and pleasant working environment, and appropriate reward programs.
Thirdly, managers should also identify programs and activities like employee
assistance program and morale committees to boost morale, ranging from
awards and work citations to education programs, to fun activities where
enjoyment translates into good spirits in the workforce (Hilgert et a., 1995;
Nelson, 1999).
Fourthly, managers should provide opportunity and recognition by
structuring career planning programs (like job rotations and skills training)
to capture prolonged interest from employees (Hoffman, 1999). This gives
employees opportunity to gain exposure while building self-esteem and

credibility that is valuable for both the organization and the employees.
Managers should also recognize accomplishments that can prove to be a
much more lucrative incentive than any financial considerations an
organization may offer.
Fifthly, managers should adopt transformational leadership (Schermerhorn,
1996) by achieving special qualities as in Figure 6 to inspire influences to
subordinates to achieve extraordinary performance. They should clearly
communicate their vision and expectations. They should be honest and
positive, use their personal power and attraction to build trust and emotion
from employees. They should understand, appreciate and recognize
employees achievement; and respect individual qualities/abilities by
empowerment and employees involvement.
Finally, managers should also develop human relations by promoting positive
morale as it is the outgrowth of a caring, responsive organizational climate
(Frunzi and Savini, 1997). Paying attention to the little things that workers
value, emphasizing open and honest communication, and developing
employee recognition programs are essential supervisory practices leading
to positive employee morale and substantial organizational returns.
Above guidelines will be only effective with support from all parties within the
organization. Effective managers should also observe morale frequently and conduct
employee attitude survey timely to ensure morale is on its highest level (Stone, 1998).


Ellis, department managers of Opel Limited, recently has some major

problems in understanding and supervising her departmental employees.
The employees morale was low as indicated from several symptoms: no
respects to Ellis, low productivity, general lack of cooperation, loss of
interest and enthusiasm, and change in attitude (George et al, 1992; Weiss,
With help from human resource manager, Ellis found that there are three
major factors to cause the low morale. Firstly, Ellis was a directive and
control oriented leadership (McGregor s Theory X in Schermerhorn, 1996)
and liked to do most part of the job. Secondly, Ellis always lost her temper
in handling difficult problems (George, 1985; Hilgert et al, 1995) and
challenged her employees for poor work at open area. Lastly, Ellis
character made her seldom showed her recognition and appreciation to her

employees for any achievements (Belilos, 1999). This all resulted her
employees feeling frustration, negative-minded, losing interests in work that
eventually affected productivity and morale.
Ellis has consulted the human resource manager for ways to improve the
situation. She will change to be a transformational leadership
(Schermerhorn, 1996) to inspire morale by providing employees with
opportunities, recognition, empowerment and involvement (Hoffman,
1999). She will improve her human relations and learn how to phrase work
directives as requests and suggestions rather than just giving out orders
(Frunzi and Savini, 1997). Furthermore, Ellis will create a trustful and
positive culture through supportive work environment (Belilos, 1999).