Improving morale in the workplace

Posted on August 11, 2022 by Kess Crighton

The ongoing cost of living crisis has been a daily talking point – and a daily source of stress – for millions of Britons. Soaring inflation and energy bills have combined with stagnating wages to create a perfect financial storm.

The Office for National Statistics reports that UK living standards had taken a record fall, with workers’ average pay – which has increased, but not at the rate of inflation – down an unprecedented 2.8% year on year. 

This squeeze on people’s spending has, obviously, not gone unnoticed: a recent report by Deloitte found that Gen Z and millennial workers are using all their monthly incomes on living expenses, with no disposable income left over for mood-boosting, but financially unjustifiable, treats. This daily pressure has led to Gen Zs and millennials citing the cost of living crisis as their number one concern – overtaking climate change, which took the number one spot in Deloitte’s 2021 survey of the same cohort.

Tough times, then – particularly for more junior workers at the lower end of the pay spectrum. There are, however, small but meaningful ways in which businesses of all sizes can raise employee morale. One such approach involves introducing or reconfiguring employee reward schemes.   

Rethinking rewards

Outside of their Christmas gifting programmes, many organisations offer rewards to employees on a very occasional basis – around six-month performance reviews, for example, or upon teams or individuals hitting their annual targets. It was a logically sound approach during more economically stable times: one or two ‘big bang’ gifts or bonuses designed to dazzle employees with the company’s generosity. That these gifts would be all but forgotten in a month or so didn’t really matter – that initial “wow!” was all that really counted.  

But with watchful frugality now becoming a permanent state of being for many workers, splashy one-off gifts are failing to provide the lasting morale-boost they need right now. It may be time to adopt more of a ‘little and often’ approach, spreading the employee rewards budget across the entire year, rather than focusing it all on rare but spectacular blowouts. 

A big reward is, of course, a lovely thing for an employee to receive. But what happens across the rest of the year? A regular treat or two – however small – would do wonders in habitually buoying their spirits, while reminding them that they’re appreciated by their employer. 

Research demonstrates the effectiveness of this ‘little and often’ approach. A study by Professor Alain Pinsonneault of McGill University, Montreal revealed that companies opting to reward employees in this way enjoyed stronger, happier workplace cultures and lower churn rates. As well as improving morale in the workplace, these small, regular rewards offered incredible ROI when contrasted against the high costs of replacing disenfranchised staff.


Showing appreciation on a deeper level 

Another consideration for this year: as research showcased by Harvard Business Review demonstrates, gifts tend to have a bigger positive impact on staff morale and productivity than cash bonuses. Obviously, everyone likes free money, and nobody is likely to turn it down. But workers report that receiving a gift from their employer goes further in making them feel appreciated and ‘seen’. It really is the thought that counts. 

In fact, the above study showed that productivity increased by around 25% when employees were given just a small gift. When the same employees were given a cash bonus, they were grateful, but this gratitude was not reflected by a noticeable uptick in productivity. Small gift? Big morale boost. Cash bonus? Minimal impact.  

In uncertain economic times, weekly treats and fun little luxuries are the first things to get cut from household budgets. But as we’ve seen, when a workplace can step in and reinstate those treats and luxuries – whether they come in the form of food, drink or corporate gift cards – the resulting positive impacts can be remarkable.