Q: I have an employee turnover problem, and morale is a concern of mine. It’s hard to please everyone. What do you suggest?

A: If your business has an employee morale problem, you should first look in the mirror to see if your management style is a contributing factor.

Contrary to what you may think, surveys show that compensation is not the number one motivator of employees. While we all need a living wage and the security that salary and benefits bring, respect and appreciation are the primary elements that contribute to good employee morale.

Other factors that influence morale include:

• Recognition – Acknowledgment of a job well done. Think “employee of the month award.”
• Inclusion – The feeling that management values and considers employee opinions. Monday morning round-table discussion of important issues affecting their work environment.
• Communication – Keep employees informed about management goals and how each can contribute to their success. Give periodic updates so they can see progress being made.
• Challenge – A work environment that is not mundane and encourages creative thinking.
• Opportunity – Some people are not content to stay in the same position forever. Unless they see opportunity for advancement -- with additional responsibilities -- they will lose interest.

Owners and managers must try to understand how best to relate to employee needs. This can be accomplished in everyday conversation and interaction with the individual. Try to be a good listener and talk with, not to, them.

While you must encourage your employees to think for themselves, they must also know that you are available when problems arise, both work related and those of a personal nature. Be sensitive to individual lifestyle needs and offer flextime hours and discretionary time off for an emergency like a sick family member.

While compensation may not be the primary motivator, it is important for you to be aware of the going rate for each position. Compensation should ultimately be based upon performance, not seniority. Make sure they know and understand every aspect of their compensation package, not just their take-home pay.

It’s a good idea for your salary scale and benefits to be competitive with others in the same industry. It costs the equivalent of six to nine months’ salary to replace an employee when one considers the cost of training and employment agency recruitment fees. It also places a burden on the remaining employees to take up the slack until a replacement is found, which can be become a real morale problem.

Gray Poehler is a volunteer with the Naples Chapter of SCORE.

A SCORE counselor since 2005, Gray Poehler owned and operated an independent insurance agency with 20 employees and two locations. He has earned the Certified Insurance Counselor designation and is familiar with both personal and commercial property and casualty insurance. Areas of expertise include: Business Finance and Accounting; Business Strategy and Planning; Business Operations; Human Resources and Internal Communications; Sales, Marketing and Public Relations.

To learn more about management issues of small businesses, contact the SCORE office nearest you.