It’s no secret that employee morale is important to the overall success of a business. A positive and healthy work atmosphere is not only more pleasant, but also can have a direct effect on performance, productivity, and ultimately on your business bottom line.

There are many reasons why good employee morale is important in the business context: First, it can help improve employee retention and reduce turnover levels. This is especially important in industry sectors or geographic areas where there are talent shortages. Linked to this, good morale has been linked to lower absenteeism levels. Third, these two factors have a direct impact on business performance and productivity, which is especially noticeable in small businesses. And fourth, high morale does impact customer satisfaction and helps build a stronger business reputation.

Many firms offer financial rewards to boost employee morale, but does this approach always work? The problem with financial incentives like stock options and annual bonuses is that they fail to generate genuine interest and engagement in work. Employees can be fairly compensated and still feel disengaged. This is not to say financial rewards should be scrapped, but rather complemented with other ways of boosting staff morale, such as the ones described below.

1. Rethink Recognition

If an employee is doing good work, there’s no reason to wait until the annual review to thank them or praise them for it. A US survey showed that approximately 45 percent of workers had not received recognition for their work in six months or longer. Recognizing employee’s achievements on the spot is likely to come across as more genuine than doing so at a fixed time of the year.

Implementing values-based recognition program is a good way to build appreciation into your corporate culture. This combines incentives with recognition: incentives are a traditional approach with known frequency and known rewards, which are mostly tangible and number-based, whereas recognition is frequent and the rewards unknown, incorporating a surprise element that can improve motivation. When designing a values-based recognition program, ensure that corporate values translate into specific staff behavior, and offer employees a choice of recognition so they are rewarded in ways that are meaningful to them.

2. The Right People In The Right Role

Employees are hired based on their skills and experience, but in the modern working world, skill sets are in a constant state of change. So ask yourself, is everyone in your company or department doing the job they’re meant to do, or the job that can bring them the highest satisfaction?

One of the keys to high morale is the opportunity to do meaningful work. According to some studies, this is far more important than financial rewards or compensation, since having a sense of purpose is a crucial driver of human behavior.

3. Bring Health & Wellness Into The Equation

The figure of the “happy employee” tends to focus on psychological or emotional aspects, but often overlooks the physical ones. Health and wellness are important to morale as they can reduce sick leave, which according to the US Bureau of Labor Statistics, costs US companies nearly $580b per year.

The topic of employee wellness is increasingly being brought into the conversation among HR professionals. Consider establishing a corporate wellness program, and make it easy for employees to adopt healthy habits in the workspace by adding vending machines, relaxation rooms, in-house stress relieving activities, etc.

4. Consider Adjustments To Working Hours

American corporate culture is notorious for its long hours, with working weeks of nearly 50 hours or more not being uncommon. According to a Gallup survey, the length of working week has only increased over the past 20 years. In many companies, the working week often extends over the weekend, with a third of US employees working on weekends too. However, working (or being at the office) for longer hours does not equate getting more work done, and can lead to burnout very quickly.

So, can employee working hours be adjusted? Some corporations have already tried this approach, starting with Amazon, which offered some of their staff a 30-hour working week at 75% of salary. The idea of the 4-day working week is becoming increasingly popular as time goes by, so you could also consider ways of using technology to implement this while boosting efficiency and having a positive effect on employee morale.