The Measure of Morale
"So many managers believe you can't measure morale," says Jack Stack, CEO of Springfield ReManufacturing Corp. (SRC), a Springfield, Mo., company that overhauls truck parts. "That notion is not only wrong but dangerous. What gets measured gets done. If you don't measure morale, you wind up taking it for granted. You don't focus on it," says Stack, whose company had 1998 sales of about $150 million.
Employee morale isn't taken for granted at SRC any more. In 1996, one of SRC's subsidiaries took part in a survey of employee morale conducted by the Gallup Organization for Inc.'s 1996 "State of Small Business" issue. The results were so intriguing that SRC decided to modify the survey, adapting 14 of the questions to suit its own needs. SRC management then distributed the new surveys to all its other subsidiaries and asked employees to complete the forms anonymously.
The results were surprising. Notably, SRC's Heavy-Duty division, one of the company's most profitable subsidiaries and one that Stack considered "the crown jewel of SRC," had very low scores in three areas. For example, 43% of the employees in the division disagreed with the statement, "At work, your opinions count."
What was the matter? Management at Heavy-Duty decided to recruit volunteers for an employee-satisfaction committee. Eighteen people, representing all departments and shifts at the division, joined the new committee. Its mission: to improve Heavy-Duty's scores in the problematic areas of the survey.
It wasn't hard to find the problems, Stack recalls. Even a member of the committee said he didn't feel his opinions counted at work. He described a simple problem that affected his work that he had been complaining about for two years, with no resolution. The committee was able to remedy the situation the next day.
"It soon became clear that we didn't have two or three big problems at Heavy-Duty," Stack observes. "Rather, we had loads of little problems, most of which could be solved quickly and inexpensively just by bringing them to the surface and focusing on them."
SRC learned its lesson. Now, the company conducts an employee morale survey every six months -- and tracks its employee morale data religiously. For Gary Brown, SRC's corporate director of human resources, the data help indicate what's working, and what's not, at the company. "It gives me a gut feeling for what's going on out there," he says.
"For example, if an unusually high number of employees in one department indicate on the anonymous survey that they are looking elsewhere for work, that might mean a supervisor there is alienating employees. "At least it tips you off: There's something rotten here," says Brown. Similarly, if some part of the company shows a continual decline in morale over the course of two or three survey periods, Brown knows he should find out more about the situation. He has also found that responses to a survey question asking employees whether they are looking for work elsewhere can be used to help predict the company's turnover rate.
In general, SRC has had good success with using employee focus groups, such as the one used in Heavy-Duty, to solve problems that the survey identifies. And the company has made some significant changes based on issues raised by the survey. For example, Brown says SRC has altered some of its training for supervisors by increasing the emphasis on showing concern for employees. That's because Brown has discovered that a crucial survey question is the one that asks whether a supervisor or someone at work seems to care about the employee as a person. If employees indicate that no one seems to care about them as people, Brown observes, they are likely to answer other questions negatively, as well. "They want someone to care about them," he concludes.
Supervisor training isn't the only thing that's changed at SRC. Survey results helped management realize that many employees didn't understand the mechanisms for moving up in the company's ranks. Now, Brown says, the company has changed its annual performance review form, called an employee annual report, to include a section on individual career planning.
All in all, the surveys have taught SRC management a lot. Not the least of the lessons is just how easy it is to be ignorant of many employee concerns. "There are problems out there we don't even know about," Brown says. "It is a continual learning experience."