Veridian surveys its employees and discovers that morale is low and that everyone finds Veronica intimidating. They tell Veronica to start complimenting everyone. On the other hand, almost everyone likes Ted. The one exception? Men over 50 in upper management. Although he insists Ted doesn't need everyone to like him, he sets out to get the older men to like him too.
Puzzled by the concept of "happy employees," Veronica calls Linda in and asks for suggestions. Linda suggests that Veridian let its employees have decorations in their company. Veronica agrees, but the company selects the decorations and assigns them to the employees. Linda discovers that she's suddenly a cat person, while other employees have cars, Green Bay Packers, or space decorations. When Veronica comes in, praising everyone for anything, she tells the employees that it was Linda's idea. No one's happy with Linda.
Linda is worried that the company thinks she's a cat person and complains to Ted. Ted is more concerned making plans to approach Manny, an older employees. He tries to be friendly with Manny, who first thinks that he's going to be fired. Ted finally gets through to him and invites him to lunch, and tells Manny to make sure he brings his older co-workers with him.
Veronica visits the lab and compliments Phil and Lem on their work. Phil is happy to be praised, but Lem thinks she's just complimenting them because she's under orders and it doesn’t mean anything. Meanwhile, employee and fellow cat person Sheila talks to Linda and figures the company choose cats for them because they're quick and smart like cats. Linda begins to see that being a cat person isn't bad.
At lunch, Ted is initially uncomfortable around the older men, who think he's too tight. He finally starts telling jokes and drinking booze. He's not big on their sexual harassment jokes, though, but they like him enough to invite him to a strip club. Meanwhile, Linda bonds with her fellow cat employees who start obsessing about cats. She admits to Ted that thanks to the company program, her morale is actually improving.
Things continue, with Veronica giving Phil and Lem more phony praise. As a result, Phil starts to fall for her. Meanwhile, Linda gets a cat from her cat people. And Ted's new friends start hitting him up for favors like back adjustments.
At lunch, Linda decides to talk with the outer space employees. They think they're too smart for her, and the cat employees see her as a traitor. Veronica comes to the cafeteria to improve morale and ends up praising a smitten Phil again.
Later, Linda discovers that the cat people have destroyed her cat decorations. They show up to tell her that they left her a special "present" on her car seats, but she points out she didn't drive. They quickly run away to get rid of it. Meanwhile, Ted comes to his office to discover the older men throwing a party. He's finally had enough and orders them all out.
Ted goes to warn Veronica that Ted is falling in love with her, and Veronica admits that she's so obsessed with complimenting people that she's making up words. They figure that as long as they do their jobs, they don't have to be liked. Veronica starts to tell the employees that thanks to Linda, they're going to get rid of the decorations and go back to normal. Lem comes in, having written up plans that he's convinced are actually worth a compliment. As soon as he hears Veronica's speech, he tears them up... until he hears he saying she'll still compliment people for their best work
Later, Veronica tries to explain to Phil that she doesn't want a relationship, but if they were two entirely different people somewhere else, it might have been. Phil accepts that. Linda discovers that she's raised company morale... because now everybody hates her. And Ted decides that some things aren't worth getting Manny and the guys to like him.
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