There are three steps to building morale at your company, whether times are good or times are tough, whether you have a large company or a small company.

In taking the first step, consider this: Extensive research indicates that two out of three people are unhappy in their jobs. Ask them why and they'll tell you it's not the work. It's not the environment. It's the people they work for and the people they work with.

And most of us will admit that we could/would get more done if we wanted to. Make no mistake about it, morale makes a difference in your company's productivity and profitability.

In Step 2, realize that building morale starts with managing expectations. Surprises and disappointments will happen. The higher they are, the lower they fall. Instead, manage expectations by being realistic when addressing new situations.

When you win a bid, how are you selling it to your staff? Is it, “This is going to guarantee we'll hit our goals this year.” Or, “This is going to be a great project.” And maybe, “This project won't take much time. No problem.”

When you sell a project like this, and something goes even slightly wrong - a shipment shows up late, a vendor misses a deadline, a price is underestimated, the crew is expected to work an extra weekend - the disappointment is great.

A realistic approach, on the other hand, preserves healthy morale. “This is a big project. It could get us to our 2003 goals. But it's going to take a lot of extra work from all of us. The good news is that when we meet our annual goals, we all go home and it’s happy holidays!”

On to Step 3. The defining moment of building morale is realized at the point of engagement - when things go wrong - a client is lost, layoffs are imminent, holiday bonuses evaporate.

Under these circumstances, reviving morale effectively will take three stages:

First, let them vent. Provide opportunities to commiserate, support one another, share stories, and relieve stress. Schedule a town meeting-style gathering where people can ask questions, share their thoughts and ideas. Include situation status on department meeting agendas.

Second, limit venting time. Like so many things, venting is best when done in moderation. Encourage your team to keep proper perspective. A missed deadline with limited ramifications may command a few minutes of ranting, while it may take several days to settle down after a layoff of 10 percent of one's team.

Third, begin rebuilding trust by increasing communication. Now is the time to communicate, communicate, then communicate again. Trust is built by sharing information - not holding it back. Now is the time to share everything you can (not necessarily everything you know). Tell them why. Tell them what they can expect short-term and long-term. Tell them what you and the organization expect of them as individuals and as a team. Explain the organization's commitment to each of them. Explain your commitment to each of them.

Building morale takes a lot of planning and hard work. Once established, though, it is well worth the effort.