troductionMorale is the esprit de corps inside organization and is a product of satisfaction with work done, sense of personal worth, identification with the group, pride in the organization, general satisfaction with remuneration and benefits (Monk, 1998). Therefore, morale is vital to organizational success as it affects employee performance and productivity, which in turn affect individual and organizational objectives.2.Literature ReviewMorale has been defined by Beach (Monk, 1998) as the total satisfaction a person derives from his/her job, working group, boss, the organization and environment. It is also affected by his/her personality structure. Morale pertains to the general feeling of well-being satisfaction and happiness of people. Morale can vary from positive (high) and negative (low), but never absent (George, 1985). Effective managers need to exert their energies to understand factors influencing morale, the impact of morale on productivity, constantly monitor indicators of low morale and identify ways to build or maintain morale (Figure 1).2.1Factors Influence Morale in WorkplaceUnderstanding the factors influencing morale can help the management to develop ways to maintain high morale. It can be identified as external and internal factors (Figure 2):External factors are influences outside the organization that are beyond the managements control, such as employees family relationships, problems with friends, etc (Hilgert et al, 1995). The factors may significantly affect employees morale and hence, effective managers should alert to their existence and do whatever possible (like counseling with empathetic listening) to reduce the impact.Internal factors involve supervision and management aspects, which are more complicated as they are associated with morale to the degree of which individuals identify with the goals of the organization (Costley and Todd, 1991).SupervisionManagers general approach to supervision and leadership style directly affects employees morale. McGregors theory (Schermerhorn, 1996) in Table 1 indicates that managers with Theory X assumptions tend to be overly directive and control oriented, which create passive, dependent, and reluctant subordinates with low morale. In contrast, managers with Theory Y perspectives give subordinates more participation, freedom, and responsibility to satisfy their self-esteem, self-actualization needs and self-fulfilling prophesy that foster high morale. Therefore, good morale is based on managers ability of delegation, empowerment and communication.Theory X assumes people:-dislike work-lack ambition-are irresponsible-are resistant to change-prefer to be led rather than to leadTheory Y assumes people:-are willing to work-are capable of self-control-are willing to accept responsibility-are imaginative and creative-are capable of self-direction

Table 1: McGregors Theory X and Theory Y(Source: Schermerhorn, John (1996), Management, fifth edition, John Wiley & Sons, Inc, Canada, p 35)Managers general attitude and behavior in day-to-day relationships also have a significant influence on employees morale (George, 1985; Hilgert et al, 1995). If managers show negative attitudes (like suspicious, worry, or lose temper), employees tend to follow suit and low morale will likely result. Conversely, if managers show positive attitude (like confidence in work), this reinforces their positive outlook and creates high morale.Managers skill at human relations has a direct bearing on employees morale (George and Cole, 1992). Good morale can only be encouraged through work environment with good human relations, respect and recognition for individuals, good communication and counseling.ManagementHigh morale cannot be ordered, but it can be fostered by conditions in the workplace that are favorable to its development (Hilgert et al, 1995). Employees morale is inspired by motivation. Herzberg's Two-factor Theory (Figure 3) indicates that motivators determine job satisfaction and performance while hygiene factors do not motivate but their absence can result in job dissatisfaction (Stone, 1998). Good morale depends on managements sensitivity to correct hygiene factors (like pay, working conditions, interpersonal relations, supervision, company policy and administration) and build motivators (like recognition, intrinsic interest in the work, responsibility and advancement) in the organization.Workplace climate is one key aspect influencing morale (George and Cole, 1992). A trust, open communication, friendly and vitality workplace can affect morale and help employees to feel more satisfied in their jobs. Good morale can be fostered through strategic communications to share organizational goals and expectations with employees (MacDonald, 1999; Belilos, 1999). Poor morale occurs when employees are insecure and doubtful for organizational goals due to lack of open communication and trust.2.2Impact of Morale on ProductivityDavis (Frunzi and Savini, 1997) points out that there is not always a positive correlation between morale and productivity (Figure 4). However many substantial evidences show that in the long run high-producing employees do tend to have high morale.High morale puts employees in a frame of mind to be productive and in a burning desire to achieve and seek increased responsibility (Hilgert et al, 1995). Employees are willing to cooperative, loyalty, voluntary discipline, initiative-interest, and pride in organization. These distinctive features make employees satisfying in their position, have confidence in their ability, and work with enthusiasm to meet the organizations strategic business objectives.Unfortunately low morale is detrimental to the health, vitality, and productivity of the organization (Frunzi and Savini, 1997). When it is present, employees feel that their professional lives have little worth or meaning. Boredom, frustration, passive or openly hostile set in, and employees experience a feeling of hopelessness to change existing circumstances. 2.3Indicators of Low MoraleIndicators of low morale can be a thermometer to measure organizational ineffectiveness (Monk, 1998). Table 2 has identified indicators of low morale (George and Cole, 1992; Weiss, 1998).1.High labor turnover2.No respect for supervisors3.Low productivity4.Excessive waste5.Large number of grievances6.Large number of accidents7.General lack of cooperation8.Poor quality of production9.Low regard for the company10.Excessive sick leaves11.Breaches of discipline12.Excessive absenteeism13.Loss of interest and enthusiasm14.Requests for transfers15.Change in attitudes16.Disloyalty

Table 2: Indicators of low morale2.4Ways to Build MoraleBringing and maintaining morale to a high level is a continuous process and cannot be achieved simply through short-run devices so prevention for low morale is important (Hilgert et al, 1995; Betts, 1989). Morale varies day to day and it is contagious in both directions because both favorable and unfavorable attitudes spread rapidly among employees (George 1985). It should be a priority concern to develop and maintain employees morale at as high level as possible without sacrificing organizational objectives. Figure 5 suggests some ways in which managers can build morale.Firstly, managers should show their involvement and concern by investing a significant amount of time in advising, counseling, coaching, training and listening to their employees, in which to ensure employees are clearly aware of organizational goals and expectations (NcNamara, 1999).Secondly, managers should create corporate culture and supportive work environment by effective human resources strategies (Belilos, 1999). It includes positive discipline, fair and just treatment to all, clearing defined policies, career and personal development training programs, comfortable and pleasant working environment, and appropriate reward programs.Thirdly, managers should also identify programs and activities like employee assistance program and morale committees to boost morale, ranging from awards and work citations to education programs, to fun activities where enjoyment translates into good spirits in the workforce (Hilgert et a., 1995; Nelson, 1999).Fourthly, managers should provide opportunity and recognition by structuring career planning programs (like job rotations and skills training) to capture prolonged interest from employees (Hoffman, 1999). This gives employees opportunity to gain exposure while building self-esteem and credibility that is valuable for both the organization and the employees. Managers should also recognize accomplishments that can prove to be a much more lucrative incentive than any financial considerations an organization may offer.Fifthly, managers should adopt transformational leadership (Schermerhorn, 1996)by achieving special qualities as in Figure 6 to inspire influences to subordinates to achieve extraordinary performance. They should clearly communicate their vision and expectations. They should be honest and positive, use their personal power and attraction to build trust and emotion from employees. They should understand, appreciate and recognize employees achievement; and respect individual qualities/abilities by empowerment and employees involvement.Finally, managers should also develop human relations by promoting positive morale as it is the outgrowth of a caring, responsive organizational climate (Frunzi and Savini, 1997). Paying attention to the little things that workers value, emphasizing open and honest communication, and developing employee recognition programs are essential supervisory practices leading to positive employee morale and substantial organizational returns.Above guidelines will be only effective with support from all parties within the organization. Effective managers should also observe morale frequently and conduct employee attitude survey timely to ensure morale is on its highest level (Stone, 1998).3.ApplicationsEllis, department managers of Opel Limited, recently has some major problems in understanding and supervising her departmental employees. The employees morale was low as indicated from several symptoms: no respects to Ellis, low productivity, general lack of cooperation, loss of interest and enthusiasm, and change in attitude (George et al, 1992; Weiss, 1998).With help from human resource manager, Ellis found that there are three major factors to cause the low morale. Firstly, Ellis was a directive and control oriented leadership (McGregor s Theory X in Schermerhorn, 1996) and liked to do most part of the job. Secondly, Ellis always lost her temper in handling difficult problems (George, 1985; Hilgert et al, 1995) and challenged her employees for poor work at open area. Lastly, Ellis character made her seldom showed her recognition and appreciation to her employees for any achievements (Belilos, 1999). This all resulted her employees feeling frustration, negative-minded, losing interests in work that eventually affected productivity and morale.Ellis has consulted the human resource manager for ways to improve the situation. She will change to be a transformational leadership (Schermerhorn, 1996) to inspire morale by providing employees with opportunities, recognition, empowerment and involvement (Hoffman, 1999). She will improve her human relations and learn how to phrase work directives as requests and suggestions rather than just giving out orders (Frunzi and Savini, 1997). Furthermore, Ellis will create a trustful and positive culture through supportive work environment (Belilos, 1999).