Building Morale the General Electric Way

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General Electric Chief Executive Officer Jeffrey Immelt waived his multimillion-dollar bonus last year as the economy was mired in a recession, though he went to bat for senior executives, who helped set a record for revenue.

That's one way business leaders can improve employee morale.

After all, if the recession is causing serious challenges for your small business, it's most likely that every employee in your office is feeling the pressure.

Hard times for the company can mean fewer perks for workers, changing employee expectations and increased competition within the office. Worst of all, employees are likely seeing friends they've worked with for years get laid off -- and worrying they might be next.

An effective leader should take proactive steps to ensure that sinking morale doesn't hurt productivity or turn the office into a locus of stress. Here are some reliable ways to keep spirits up in your office, along with a few approaches that might worsen the situation.

Do: Show strong leadership: Being a visible and vocal leader is a crucial first step toward easing employees' anxieties. You may have more on your plate than ever, but it's not the time to be hiding behind your desk. Employees will feel better if they know their leader is actively and confidently guiding them. Simply making yourself seen throughout the business is important, but you might also give speeches, send out notes of encouragement or drop in on meetings that you would normally skip.

Do: Make employees feel valued: A worker with high morale is a worker who feels like he is valued by the company. The simplest way to make sure employees know their work is appreciated is to simply tell them, says Maynard Brusman, a consulting psychologist and president of executive coaching firm Working Resources. "One executive I worked with gathered his leadership team and explained to each person how they were valuable to the company," says Brusman. "Then each member of the leadership team went back to their people and told each of them how they were valuable, and on down the line to every employee. It's a great way to build loyalty."

Do: Embrace change: Instead of trying to preserve the way things have always been done, use the turbulence of an economic downturn to productively change how your company does business. If there isn't enough work to keep employees busy during a slow period, encourage them to tackle projects there normally wouldn't be time for, like redesigning the firm's Web site, repairing equipment or brainstorming new product ideas. Give individuals opportunities to suggest cost-cutting measures, and, if downsizing leaves you short-staffed, allow loyal employees the chance to try out new roles and learn new skills.

Don't: Pretend it's business as usual: Employees can tell when you aren't being honest about the challenges the company faces. If you aren't candid, employees will feel like you don't trust them and begin to fill in the information void with rumors and speculation. "It's so critical for leadership to be open and honest and treat people like adults," says Brusman.

On the other hand, bosses shouldn't be overly gloomy. It's a balancing act.

Don't: Lay off workers without compassion: Laying off workers is never easy, and it's tempting to get the job done in the quickest and most efficient way possible. But delivering the bad news without compassion could come back to haunt you in more way than one, in the advent of Facebook and Twitter.

Don't: Let your own morale begin to sink: It's natural to have doubts and worries, but when you speak with employees, spread a sense of optimism and energy, not anxiety.

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