I think maybe some sort of sanity/fear mechanic might be cool. Like… maybe less on the Lovecraft, perhaps.
Like, stuff happens that would put a hit on a survivor’s sanity/fear/panic. Maybe less of a morale effect, and more on stat debuffs or some other negative effect. A panicking survivor will be less keen on hitting a target and just swing his/her weapon wildly, giving a drop on accuracy. For firearms, in the case of burst-fire weapons, become unable to use semi-auto firing. Stamina would also drop faster because the survivor is more or less panicking and not breathing properly. Maybe as a semi-positive effect a slight speed boost to run away.
On the flipside, it would also be nice if the reverse can happen. A survivor feeling confident/brave will be a lot more level-headed when dealing with enemies.