The hidden side of keeping employee morale high

How many "Dilbert" comics are around the office, or how people park their cars could indicate overall employee morale. Here, a woman works online in her cubicle at an office in Beijing.

Kai Ryssdal: Time now for a little Freakonomics Radio. It's that moment every two weeks where we talk to Stephen Dubner, the co-author of the books and the blog of the same name -- it's about the hidden side of everything.

Dubner, good to talk to you again.

Stephen Dubner: Great to talk to you, Kai. And I've got a question for you.

Ryssdal: All right, shoot.

Dubner: Are you pretty happy with your job these days?

Ryssdal: Uh, am I pretty happy? Most days, yeah.

Dubner: Tell me this: What about your co-workers? How's their employee morale, would you say?

Ryssdal: It depends on how heavy the beatings are. But no, actually they're doing all right.

Dubner: You know, workplace morale is something -- especially in an economy like this -- is something really worth thinking about. It translates directly into productivity: low morale, bad for the bottom line; good morale is kind of a tide that lifts all boats. Now, here's Michael Johnson, who studies organizational behavior at the University of Washington.

Michael Johnson: A lot of the current research on employee morale and managing people in general in organizations suggests that this may be the only remaining competitive advantage that organizations have. Organizations that do this well, they tend to do really well financially too.

But Kai, let me run an interesting wrinkle past you: In a tough job market like this one, fewer people quit their jobs -- less than two million a month now compared to more than three million before the recession. Which means that more grumpy employees are staying put.

Ryssdal: Right. So they're staying put because they're worried that they can't find another job, right?

Dubner: Exactly.

Ryssdal: How do you measure grumpiness?

Dubner: Well, unfortunately that's the problem: It's hard. A lot of firms do surveys, but personally, in my work --

Ryssdal: Here's the thing: For HR managers everywhere -- we all lie on those surveys.

Dubner: Yeah, exactly. We lie on most surveys. But especially, 'How happy are you? And I'm the person who pays you and I need you to tell me how happy you are.' So sometimes you have to get creative. We actually put this question out to readers on our Freakonomics blog, and we got some good answers. Here's Damon Beaven, he's a software engineer in Lexington, Ky. He used to visit lots of different companies; here's how he sussed out worker morale in those places.

Damon Beaven: I looked for the number of "Dilbert" comics, and that seemed to be inverse proportional to the level of morale. A lot of "Dilbert" comics seemed to be a passive aggressive way of employee complaining.

Ryssdal: This is good. First of all, I love the Dilbert index, but also I love that we're crowdsourcing this segment now. That's awesome.

Dubner: Of course. We've cut down here, I don't know if you knew. All right, try this one: This is from a management consultant named Tim Wadlow. He visited more than 100 manufacturing companies around the world. He came to believe that parking direction is an indicator of employee morale. Here's what Wadlow saw at the companies that had low morale.

Tim Wadlow: A lot of these people seemed very anxious to leave work and often, if they got to work, they would back their cars into their parking spot. And it seemed like the moment they got to work, they were so dreading it that they were planning their escape.

Ryssdal: I like that, that's great. Now, that doesn't apply here at Marketplace world headquarters because our parking lot is mandated nose-in parking only.

Dubner: That's a way to keep morale high -- force people to park that way.

Ryssdal: That's true. You must. OK, this is good antidotal evidence -- the key phrase there being 'antidotal,' my friend.

Dubner: Exactly. What you really want to know is you want to keep your eye on sick days, because calling in sick -- especially when you're not sick -- is kind of the ultimate expression of bad morale.

Ryssdal: Well, yeah, but come on -- HR's going to call everybody who calls in sick and says, 'I need a note from your doctor'? What are we -- 12?

Dubner: Not going to happen, unfortunately. Michael Johnson, the University of Washington professor we heard from earlier, he investigated a pair of auto parts plants that tried out a variety of incentives. Some were carrots, some were sticks. They wanted to cut down on absenteeism. He found that the combination of threat and reward actually worked very well. But he also found an interesting loophole, a little something we call the FMLA, or the Family Medical Leave Act. Are you familiar with that?

Ryssdal: Yeah, it's you get time off to care for a sick, injured whatever family member, yeah.

Dubner: Exactly, the federal law. Now, when the company made it harder to call in sick the old way, some employees found a new way. Here's Michael Johnson.

Johnson: Overall absenteeism dropped about four to four-and-a-half days, but the absenteeism that was related to the FMLA went up about a day or a day-and-a-half over the year. So it seemed to us, they might actually be gaming the system so that they could keep taking days off work and not suffer any punishment for it.

Ryssdal: Right, so it took us a while to get there, but this is the hidden side, right? This is the unintended consequences of all that stuff?

Dubner: That's exactly right. And you know, at the end of the day, isn't it nice to know that whenever you're feeling down and need a little me time, the federal government is there to give you a day off?

Ryssdal: Yeah, right. Stephen Dubner, Freakonomics.com is the website. He's back in a couple of weeks. Talk to you later.

Dubner: Thanks so much, Kai.

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