Happy Staff are More Productive

In: BlogDate: Jun 05, 2011By: Henry Stewart

“Improved psychological well being (PWB) leads to a more productive and successful workplace. The case has been proven in academic studies over the last ten years.”

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Those were the words of Ivan Robertson, giving a seminar on well-being at the LSE this week.

This, I think, is an important statement. At Happy we are evangelists for the belief that people work best when they feel good about themselves and, therefore, that the main focus of management should be on enabling people to feel good, to feel valued, to feel motivated. It is great to know that this gut feeling is backed up by the evidence. Happy people are simply more productive. My previous blog on the evidence for this is here.

Robertson summarises the research in his new book, Well-Being: Happiness and Productivity at Work. Here are some of the sources.

Academic Research on Well Being

In 2004 Professor Michael West and Malcolm Patterson from the UK Institute of Work Psychology published the results of an eight year study across 42 manufacturing companies into which climate factors affected productivity. Concern for employee well-being had the strongest correlation with improved productivity. Patterson’s conclusion: “It appears that a happy workforce is a more productive workforce. It is a simple message to bosses, but is backed up with hard evidence.”

Moliner in 2008 published research showing that where staff well-being is higher, workers are more likely to go “the extra mile”. Dorman and Kaiser in a 2002 study showed that customer satisfaction and service quality are linked to employee well-being. Wright and Cropanzano reported in 2002 “significant positive relations… between PWB and composite performance report.”

The Gallup Surveys

Harter and colleagues paper is especially interesting, based on huge number of workplace surveys conducted by Gallup. They first quote previous research showing a clear link between “joy”, “interest” and “love” and positive business outcomes.

From the Gallup surveys they found that for business units in the top 5% for employee engagement, 71% had above average performance, compared to just 29% for those with employee engagement in the bottom 5%. (Comparing top 25% to bottom 25%, the figures are 59% to 41% above average.) Calculating the cost solely in terms of higher staff turnover, they estimated (in a 100 person business unit) the extra costs of the unit in the lower quartile to be $300,000 a year, compared to a unit in the higher quartile for employee engagement.

Better Staff Well Being in Hospitals = Less MRSA

The Boorman 2009 review on health and well-being in the NHS even found that well-being even reduced the incidence of MRSA, presumably because happy, motivated staff behave with greater care.

Overall the evidence seems clear and returns me to the question I ask of groups I speak to:

How would your organisation be different if the main focus of management was on enabling your people to feel good about themselves – happy, valued and motivated?

My thanks to Ivan Robertson for this range of sources. It is clear that the academic backing is strong for the argument that making their workers happy should be a major, if not the major, focus of companies. What does the research say on how to make them happy, and increase their job satisfaction? I’ll look at that in the next blog.

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Henry Stewart, Founder and Chief Happiness Officer

Henry is founder and Chief Happiness Officer of Happy Ltd, originally set up as Happy Computers in 1987. Inspired by Ricardo Semler’s book Maverick, he has built a company which has won multiple awards for some of the best customer service in the country and being one of the UK’s best places to work.

Henry was listed in the Guru Radar of the Thinkers 50 list of the most influential management thinkers in the world. "He is one of the thinkers who we believe will shape the future of business," explained list compiler Stuart Crainer.

His first book, Relax, was published in 2009. His second book, the Happy Manifesto, was published in 2013 and was short-listed for Business Book of the Year.

You can find Henry on LinkedIn and follow @happyhenry on Twitter.

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