Morale and Workplace Performance

This study considers the relationship between morale and workplace productivity in a representative sample of Australian workplaces. It focuses on three questions: the shape of the relationship, whether the effects of morale are contingent on other factors, and the paths by which any effect takes place. The results show that morale influences productivity in an approximately linear fashion. The effect of morale on productivity appears to be larger when management regards product quality as important and attempts to develop a corporate ethic and culture. Morale is associated with greater work effort, but the relationship between work effort and productivity becomes stronger at higher levels of morale. Thus, part of the influence of morale on productivity is a matter of increasing the effectiveness of workers’ efforts.