Motivated Employees Increase Profits

Edition: December 2001 - Vol 9 Number 12
Article#: 1125
Author: by John O'Malley

Have you ever wondered how to increase your company's profits? Do you think the solution might be to introduce a new product, control and expand distribution channels, or perhaps acquire one or more competitors? From a tactical standpoint, all are possibilities. Yet, each offers only a short-term benefit.

Instead, perhaps you should be asking yourself two strategic questions:

1. What resource does your company currently possess that your competition does not?

2. What resource can best differentiate your company from its competition?

The answer to both is…well, keep reading.

Out of the box? or boxed in?

Most businesses, large and small, engage in strategic planning, whether that process is confined to note taking on a napkin, explored in a cramped conference room, or pondered over a three-day executive retreat. Few spend enough quality time thinking. The end result is rarely a strategic (long-term) plan of significance, but a strategic facade, a tactical (short-term) plan. It typically lacks true substance, and it reeks of status quo mentality. Even so, everyone present will swear that he or she, and the group as a whole, were thinking ''out of the box'' during the planning process. In reality, their plan usually exhibits a fear of getting out of the box.

A strategic plan becomes tactical whenever it fails to focus on the most critical asset any company can bring to bear on increasing its performance, productivity and profits – its employees, associates and partners. Stop and think. Your employees are the critical resource that your company currently has that your competition lacks (though the competition can easily acquire your best under the right situation, namely, low employee morale.)

Morale Affects Profitability

Research clearly shows that satisfied employees have fewer absences, fewer work-related injuries, higher productivity and better health, all of which significantly contribute to increased corporate profits. Companies with low employee morale experience higher employee turnover, higher workplace violence, more quality issues, and greater pilfering of company property.

Furthermore, employee-oriented companies have fewer employee/management problems, generate more improvement suggestions and ideas, and consistently deliver a higher level of service. The result is higher customer and co-worker satisfaction, both of which contribute to a company's profitability. Recruiting new employees becomes less expensive because it is easier, faster, and done less often. And let's not forget that union organizers seek out and target those industries and companies with the largest share of unsatisfied workers.

Maximizing employee satisfaction has nothing to do with being a good person, but everything to do with being a smart one. Companies that grasp this are on their way to gaining a competitive ''ledge,'' that is, a competitive advantage that goes beyond the temporary advantage offered by the proverbial competitive ''edge.'' It bears repeating: Motivated employees increase profits.

If you are having difficulty improving morale, perhaps your approach is more policy-oriented than employee-oriented. Remember that great employee morale, like great customer service, resides in the heart, not in a manual. To increase your company's profits, consider conducting a serious strategic planning session that focuses exclusively on your employees as a viable and critical asset. Identify those things that can improve on-the-job satisfaction, and hence the company's ROI, or ''return on individuals.''

Your strategic thinking should encompass the three key things that affect employee morale and satisfaction. In order of importance they are: attitude, environment and reward. The AER triad is companywide, top to bottom. Employee morale and satisfaction start at the top and are reflected in senior management's daily demeanor toward its employees and customers.

One or more bad apples at the management or worker level will spoil the best efforts to improve employee morale and satisfaction. Keep in mind these two tips:

1. Hire and fire attitude.

2. Hire slow and fire fast.

Steps to Take

The first step toward improving employees' morale and satisfaction is to improve their attitudes about themselves, their employer, their jobs, and the significance of their contributions. Do so by energizing them to excel, empowering them to make decisions, educating them about desired performance, and entrusting them to succeed without micromanagement and disrespectful input.

The working environment can either reinforce or work against your efforts to energize, empower, educate and entrust employees. A workplace environment comprises two key aspects or elements: 1 the physical element, such as workstations, ergonomics, noise, tools, smells and safety; and 2 the mental element, such as policies, procedures, pressures and people. The last one – people – can often make the other three stressful or unbearable. Remember those bad apples? Well, make every effort to get rid of them. That action alone will quickly improve your employees' working environment, and productivity will skyrocket to new heights.

If you lack the means to cherry-pick bad apples, revisit and revise job descriptions to make them more positive-attitude-oriented. As an example, consider including one or more of the following attitude adjusters in everyone's job description:

''You are responsible for adhering to and promoting corporate philosophies and its vision, mission and value statements. You are responsible for creating and maintaining a customer service level that generates no more than ____ adverse encounters, situations, issues and complaints per ____. You are responsible for generating team spirit and creating and maintaining a personal attitude and working environment that fosters the highest level of employee cooperation, morale and satisfaction. You are responsible for adhering to our ''Great Expectations'' list of acceptable and unacceptable behaviors.''

Define desired behaviors and those that will not be tolerated, give three examples of each, and ask employees to acknowledge, with their signatures, that exercising one or more of the intolerable behaviors is grounds for termination. Whenever dealing with employee issues, always seek professional legal advice for appropriate verbiage and use.

The last attitude adjuster to include is this: ''You are responsible for prioritizing your every workday thought, words, and actions in the following order of business: customer first, company second, co-workers third, and you last.

The third step toward improving morale is to focus on creating an employee reward system that is 1 performance based, 2 proportional to contribution and personal sacrifice, and 3 prompt in coming. Any compensation program that is based on performance, proportion and promptness will win the hearts of the high-performance/low-maintenance employees you want to keep and recruit, while causing the less desirable apples to find a new barrel to hide in. If you are lucky, they may go to work for one of your competitors. Further, ensure that each employee knows the exact cost of his or her total compensation package – salary, benefits and extended earning potential.

About The Author: John O'Malley is president of Strategic Visions Inc., a Birmingham, AL-based health care sales and marketing consulting firm. He is the author of ''Ultimate Patient Satisfaction'' (McGraw-Hill 1997). His newest book is ''Healthcare Marketing, Sales and Service'' (Health Administration Press 2001). He may be reached at (205) 995-8495 or More information about hiring and firing attitude may be found on his website at