Ignoring Employee Morale Will Cost You. Here's the Solution.

Stay on top of issues before dissatisfaction spirals out of control, leading to a drop in productivity and revenue and exits.

learn more about David Nilssen

By David Nilssen • Dec 12, 2014 Originally published Aug 8, 2014

Opinions expressed by Entrepreneur contributors are their own.

Most entrepreneurs start their company trying to serve the best steak in town, offer the best massage or build the best product they can. That's where their heart and passion is. But then they quickly realize that they have to recruit complementary talent to help turn that dream into reality.

Not only do they have to learn how to motivate, inspire and retain their best employees, but they are also juggling accounting, marketing, sales, product development, etc. In this environment, focusing on culture -- ensuring high levels of employee satisfaction and engagement -- typically falls by the wayside.

Related: 4 Ways to Diffuse a Toxic Workplace

But ignoring the cultivation of employee morale is one of the costliest mistakes an entrepreneur can make. Research reveals that:

There's also the collateral damage inflicted when unhappy workers taint all the other good apples in the barrel.

The solution is an improved information flow between employees and managers to stay on top of these issues before dissatisfaction spirals out of control. While the "open-door" policy is the generally accepted approach for this, the truth is few employees will be completely honest and forthcoming to someone who controls their livelihood.

Searching for a better solution, I found that anonymous employee surveys work best to improve the feedback channel. These anonymous engagement surveys cut through the fear and give leaders the valuable, direct feedback they need to know when problems arise.

A recently released guide by TINYpulse gives a solid overview of what your survey should include. They provide 20 best practices when conducting an employee survey, and I've distilled it down to my favorite five:

1. Anonymity. If you keep your surveys anonymous, employees will have the freedom they need to be completely honest. Having a portal to receive bad news is necessary to make organization improvements.

Related: 5 Steps to Getting Better Employee Feedback (Even If You Hate It)

2. Short, simple surveys take less time to complete. This makes them less burdensome to complete resulting in higher response rates.

3. Feedback sharing. No one likes to air their dirty laundry, but sharing all survey results with your team signals that you are listening to employees and receptive to all types of feedback.

4. Feedback action. One of the most notable pieces of research I've seen is that one in three employees will become disengaged if survey feedback is not acted upon. If you plan to conduct an employee survey, be ready to act on whatever feedback is shared.

5. Regular survey cadence. A one-time survey gives you a quick read on your culture. Repeating that survey over time lets you see how your feedback is trending and if your morale is improving or declining.

If you're sold and want to focus on employee happiness, I would suggest two free services that many companies start with. One is the ever-popular SurveyMonkey. I'm sure everyone has either administered one of these surveys or taken one. The second one is Google Forms, a more recent option that integrates seamlessly with Gmail and Google Docs, which is a bonus if your company is already using Google's Productivity Suite.

Best of luck as you strive for employee satisfaction. As Lord Kelvin states, "If you cannot measure it, you cannot improve it."

Related: Stopping Employees From Jumping Ship is Easier Than You Think (Infographic)

David Nilssen

Entrepreneur, Investor, Author, Philanthropist

David Nilssen is the co-founder and CEO of Bellevue, Wash.-based Guidant Financial. The company helps entrepreneurs invest their retirement funds into a business or franchise without taking a taxable distribution or incurring penalties; it also aids business owners in securing Small Business Administration loans.  

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