By Donna Green
As the stock market has so ably demonstrated, investors hate uncertainty.
Employees hate it, too.
In good times, an employee who is worried about his or her job reaches for the door. In bad times, only your strongest employees are likely to be eyeing the exit.
That's exactly what you don't want. And it's why paying a little attention to employee morale just might save your company from losing valuable human capital when you can least afford it.
Dr. Jane Parent, assistant professor of management at the Girard School of Business at Merrimack College in North Andover, has done research examining how employees respond to organizational change. Before beginning work on her doctorate, she worked for 13 years at large manufacturing companies in fields relating to financial analysis.
Parent offers this advice to employers for keeping morale up as companies change to respond to these economically uncertain times:
"The biggest thing management can do is communicate what is going on with the business," Parent said. "The more management communicates the good and bad news, the better employees will do."
Parent related an example of business-changing communication from her time at National Semiconductor. At that time, she said, the company was losing money and a new chief executive officer had taken command.
"The first thing he taught us was what 'break even' means," she said. "Everybody from top to bottom knew how to calculate it and we were rewarded on it also."
Within two years, Parent said, the company had achieved break-even and went on to profitability.
Communication is most effective when it is face-to-face, she said.
"I think too many people use electronic communication," she added.
A set speech isn't what she recommends, either.
"Face-to-face is better in a two-way communication, so people can ask questions," Parent advised.
Parent's research has shown that employees respond more positively to change that they've been able to participate in, at least to some extent.
"When everybody is allowed to participate at all levels of the organization, from the mail room to the board room, more creative ideas will come about," Parent said. "A business owner has to be open to having ideas bubble up from the bottom."
She suggests giving employees a business goal and having them suggest ways of achieving it.
One organization she studied, a large city library, told employees they needed to cut costs by 10 percent. The employees worked amongst themselves and subsequently found 10 percent savings without anyone being laid off.
"Often we get this victim mentality when the economy takes a down turn," she said.
Good managers have long known that giving employees a chance to help solve problems gives employees a greater sense of control and some ownership in the change, too.
Define clear roles
With downsizing or the elimination of contractors, jobs change.
These changes often mean employees are required to do more work and possibly of a nature they didn't do before. And these changed expectations need to be made explicit.
"When your role is clearly defined in the organization, your morale is better," Parent said. "Make sure everyone has clear roles and they understand those roles."
She suggests personal employee reviews with defined job goals and objectives.
"What does the change in work mean to the employee?" is a question that needs answering, she said.
Responsibilities that just settle onto an employee because those who were doing that work are now gone give cause for resentment. Everyone needs to know what is expected of him or her, and have management acknowledge when that expectation changes.
If employees can participate in redesigning their own role, all the better.
"I found when I was empowered to write my own goals and objectives and took part in defining my role, I was more loyal — happier in my job," Parent said. "I felt more of an attachment."
A culture of empathy and optimism
Encouraging a feeling that we're all in this together builds team spirit.
"If there is a group of people who can all empathize with each other, a synergy and teamwork develop; an underdog mentality develops and builds morale," Parent said. "Together people work better and more efficiently."
She also encourages management to be as optimistic about the future as possible, while still being honest.
"I find optimism very important to how people adapt to change," Parent explained. "If you are optimistic, you are more likely to be more adaptable to change and, in turn, have higher morale. If there is hope, that should be communicated."
Parent observes that many personality characteristics are static within a person. Yet corporate culture, especially with respect to pessimism or optimism, is contagious.
"Managers shouldn't be Pollyanna, but we can be hopeful and work toward a goal and be optimistic about the future. It will really help with morale in difficult times," she said.
Of course, optimism must be based on reality. A diet of good news will not be credible if the bad news is withheld.
Pay attention to stress
Parent points out that it is stressful to work in a business that isn't profitable.
Employees and management, she said, need to address stress.
"Employees need to know they need an outlet so they can leave their job behind at times - a hobby, exercise," she said. "It's not avoidance, but a break from work."
Owners need an outlet, too.
"Often times small business owners never take a break."
Most entrepreneurs, don't look up from their business long enough to think strategically, Parent said.
"Time has to be spent on strategy," she pointed out.
It's important to ask the question: "'Where do I want to be in five years?'"
Employees, too, benefit from knowing management's long-term vision. Parent believes businesses are more likely to retain good staff when they know the company has big plans for the future.
"Employees are more likely to be excited about the business and want to be part of the team," she said.
Thrive through change
"All the research on change and morale points to trusting, communicating, participation," Parent said. "It is a leap if you have a business that doesn't generally do this, and it is a risk that management has to take. These are different economic times and we need to try different things."
Parent said people absolutely can thrive through change and perform better after a change.
"I have found that people who participate, (who) are optimists and are clear on their roles are the ones most likely to thrive through change," she said.
QUICK TIPS TO BUILD POSITIVE ENVIRONMENT
Create a culture of optimism and empathy
Define clear roles
Build social support with team members
Have an outlet for stress
Participate in change
Understand your role or help define it