Happy Employees Are 12 Percent More Productive

July 16, 2015

The conventional management thinking is that if we pay workers enough, they will be productive. With more recent industrial psychology research findings, we find that there is a significant relationship between a worker’s happiness and their productivity at work.

Research Links Happiness to Productivity

(Image Credit: Flickr, Creative Commons: Pavlina Jane)

A recent research from the University of Warwick led by its Economics department has concluded that happiness made people 12 percent more productive, while unhappy employees are 10 percent less productive. The research team said: “We find that human happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings.”

Professor Oswald from University of Warwick said that companies like Google that invested in employee support and satisfaction has led to more to increased productivity, which in Google’s case is 37%. The finding shows that simple financial incentives are insufficient to produce highly productive employees.

Shawn Anchor, author of the book, The Happiness Advantage, has found from his research that the brain works so much better when a person is feeling positive; he tends to become smarter and more creative during work. Hence, the positive link between happiness and productivity. He adds that, “happiness leads to greater levels of profits” for companies that invest highly in the welfare and happiness of their workforce.

Some easy ways for workers to boost happiness at their workplace include helping coworkers, meditating for at least two minutes and reflecting on three things to be grateful for.

The practice all starts during the formative years as discovered in the research by Harvard professors Phil Stone and Tal Ben-Shahar where they found that students with strong social support at school and home showed high levels of happiness and a strong ability to counter stress. It can therefore be translated into the workplace productivity as students become working adults. Workers that have positive relationships with their coworkers are able to boost their levels of happiness and perform better during stressful situations at work. It goes to show that organizations that cultivate good working relationships inside their organization will benefit from increased productivity from their employees.

As a result of this study, this leads to the proposition that happier employees make better leaders. According to Alexander Kjerulf, founder of Woohoo Inc. and is the organization’s chief happiness officer, happiness is the “ultimate productivity booster.” By having happy employees, they can make better decisions and they can manage their time better, all of which are important traits and skills of good leaders. In addition, research has shown that when workers are happy, they become better collaborators and work better towards common goals.

According to a Gallup survey, only 13 percent of workers are engaged at work. This means the rest of the workforce do not necessarily enjoy their work. This costs US companies roughly $ 450 billion to $ 550 billion annually. However, this also presents a big opportunity for companies to boost company performance and employee productivity by investing in their welfare and improving workplace happiness.

However the question of how much organizational resources to devote to improve workplace happiness still remains. There remains the research opportunity to find out what are the most effective business practices out there that boosts employee happiness.

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