Happiness Is Awesome

In: BlogDate: Sep 28, 2015By: Elinor Jansen

Guest blogger Elinor Jansen updates us with a summary of Gallup’s latest (2015) study on the relationship between firm performance, organisational structures and employee engagement.

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“If employees are treated right, they treat the outside world right, the outside world uses the company’s product again, and that makes the shareholders happy.” Herb Kelleher, Southwest Airlines

What is all the talk of employees’ happiness about? Google swear by it, Zappos are famous for their investments in keeping their staff happy, and in some companies happiness is even reaching C-level as some companies now proclaim to have Chief Happiness Officers. Is this another management trend, or is the focus on the wellbeing of staff here to stay?

One cannot stress the importance of having happy employees enough. As researcher Shawn Achor puts it: “Happiness is such an incredible advantage in our life. When the human brain is positive, our intelligence rises, we stop diverting resources to think about anxiety” (in Schulte, 2015). The advantages of happy employees are so many it is difficult to know where to start – although the most effective way to explain the importance of employee happiness to executives is to point out the numbers, figures and facts.

  1. Last year revenues increased by an average of 22.2% for the 2014 Fortune 100 Best Companies to Work For. And according to the Bureau of Labor Statistics, these same companies added new employees at a rate that was five times higher than the national average. This compares to 5% for the Dow Jones Industrial Average. (Biro, 2014; Menton, 2014).
  2. A Hay Group Study reported that 94% of the world’s most admired companies believe that their efforts to engage their employees have created a competitive advantage. 85% of these companies believed that their efforts to engage employees had reduced employee performance problems (2010).
  3. From 2009 to 2014, a portfolio with shares in the companies listed in Fortune’s “Best Companies to Work For” outdid the S&P 500 with an astonishing 82.4%, and the equivalent portfolio containing shares in Glassdoor’s “Best Places to Work” outclassed the overall market by 115.6% (Chamberlain, 2015).
  4. A University of Alberta study showed that companies who focus staff on the purpose and meaning in their positions showed a 60% drop in absenteeism and a 75% reduction in staff turnover (Feloni, 2015).
  5. The well-cited study from Warwick University in 2012 managed to quantify the relationship between happy employees and productivity: half of the participants were exposed to mood-enhancing factors such as comedy clips before trying to solve problems and puzzles, while the other half embarked on the problems directly without being exposed to the clips. The first test group solved the problems much faster, and were 12% more productive (Oswald, Proto & Sgroi, 2014).
  6. According to Shawn Achor’s studies, when we are happy, our creativity triples. The likeliness of employees getting promoted goes up by 40%. Revenues grow by 37%. Employee’s productive energy goes up by 31%! (in Schulte, 2015).
  7. Clinical Psychologist and business consultant Dr Noelle Nelson has written the book Make More Money by Making Your Employees Happy. Her research shows that companies who realise the value in focusing on employee wellbeing and take actions to promote it have three times higher ROE than firms that do not. Dr Nelson gives a good example of this in practice: when Paul O’Neil became CEO of manufacturing firm Alcoa in 1987, he shocked the board members by announcing that his primary priority was to improve worker safety. O’Neil had realised this was a major issue for this staff. The following 13 years, accident rates dropped massively while productivity soared. By the time O’Neil stepped down, Alcoa’s annual revenues had increased by 500% (Cooper, 2012).
  8. The software provider Cvent found in a 2014 study that customer retention rates are on average 18% higher when employees are actively engaged at work (Colloquy, 2014).

This is the final post by guest blogger Elinor Jansen. A big thanks for all her work on happiness.


Biro, M.M (2014). Happy Employees = Hefty Profits. Forbes. Available from:http://www.forbes.com/sites/meghanbiro/2014/01/19/happy-employees-hefty-profits/

Chamberlain, A. (2015). Does Company Culture Pay Off? Glassdoor. Available from: https://glassdoor.app.box.com/s/49y1ulkftvbpsbqjgeo1zh3lvijbb9uo

Colloquy, (2014). For Loyal Customers, Look to Your Employees. Colloquy.Available from: https://colloquy.com/loyalty-strategies/for-loyal-customers-look-to-your-employees/

Cooper, S. (2012). Make More Money By Making Your Employees Happy. Forbes. Available from: http://www.forbes.com/sites/stevecooper/2012/07/30/make-more-money-by-making-your-employees-happy/

Feloni, R. (2015). eBook: 5 Tips to Create Happier Employees. Globoforce. Available from: http://www.globoforce.com/resources/features/ebook-5-tips-to-create-happier-employees/

Hay Group, (2010). Enabling, Engaging and Rewarding Employees. Available from: http://www.haygroup.com/downloads/mx/misc/enabling_engaging_and_rewarding_employees.pdf

Menton, J. (2014). Dow Jones Industrial Average Closes 2014 Below 18,000 Milestone, But Gains 7.52% For The Year. IB Times. Available from: http://www.ibtimes.com/dow-jones-industrial-average-closes-2014-below-18000-milestone-gains-752-year-1771512

Schulte, B. (2015). Do these exercises for two minutes a day and you’ll immediately feel happier, researchers say. Washington Post. Available from: http://www2.warwick.ac.uk/newsandevents/pressreleases/new_study_shows/

Oswald, A.J., Proto, E. & Sgroi, D. (2014). New study shows we work harder when we are happy. Warwick University. Available from: http://www.washingtonpost.com/news/inspired-life/wp/2015/06/29/do-these-exercises-for-two-minutes-a-day-and-youll-immediately-feel-happier-researchers-say/

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Elinor Jansen

Elinor Jansen is studying for an MSc in Management at Imperial College. She is spending this month at Happy and will write a series of posts through August 2015.

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