LoL!
I laugh because, for a while, I thought it had
too much effect on performance.
I've changed my mind now - it turns out that Morale in FM has a larger impact on younger players, while older more professional players (
also those with high Determination and Work Rate) will give you a strong effort even when their Morale is weak.
My problem was that I was playing a bunch of kids with great potential.. so they'd go on hot streaks and cold streaks according to their Morale. Now I've got a veteran "backbone" for my team, and Morale has become a secondary consideration to me.