Employee happiness in the workplace is important. Isn’t it? Most people would say you do need a general sense of satisfaction in your job but when it comes to the really critical business metrics like productivity and revenue, does employee happiness actually have any impact on business performance?

In order to apply some science to this question Warwick Business School carried out some research into the link between employee happiness and productivity. Their conclusion? There’s a connection.

Their research team showed subjects a 10 minute comedy clip or provided them with snacks and drinks. The researchers then used a series of questions to check that those ‘happiness shocks’, as they referred to them, succeeded in making the subjects happy. When it showed they did, the researchers then conducted a range of exercises designed to measure the subjects’ levels of productivity.

The experiment revealed a productivity increase of around 12%. To avoid criticism of being a purely lab-based study, the research then examined how ‘real-world shocks’ like family bereavement, serious illness or parental divorce affected another set of subjects. Again they discovered there was a causal link between unhappiness and decreased productivity.

Professor Alex Edmans from the London Business School suggests there’s a link between happier companies and shareholder returns. He cites the fact that between 1994 and 2009 Fortune Magazine’s US based ‘100 Best Companies to Work For’ outperformed their peer group by 2-3 per cent per year.

In fact, there’s quite a lot of evidence that suggests that employee happiness in the workplace does matter. But when it comes to human behaviour nothing is ever simple and if you keep on looking, you’ll find there are plenty of reports indicating that happiness in the workplace doesn’t have a positive impact. In fact some studies have even suggested that placing too much emphasis on employee happiness sets people up for disappointment – which therefore reduces happiness. Other research has found that focusing on increasing your own happiness can actually end up with you becoming lonelier as it damages your connections with other people.

As we know influencing employee happiness is complex, with work and home life intertwined. Someone might feel very unhappy in work. They might be struggling to concentrate or not be particularly motivated to do more than the absolute minimum because of a problem outside work. And conversely there are probably quite a few employees out there who are satisfied with their lot, enjoy going to work and drift along quite contentedly. Are they giving 100% effort? Definitely not. But they’re very happy. As we know, happy and engaged are not the same thing.

Furthermore, businesses cannot spend their time injecting constant happiness shocks like the researchers from Warwick Business School. That happiness ‘hit’ has to become part of the company fabric.

So where does all this leave employers?

Rather than putting too much emphasis on the need for employees to be bursting with joy every time they enter the office, employers should focus on helping employees gain more pleasure and satisfaction from their work. To do that HR needs less shock and more strategy.
Employers are slowly paying more attention to the overwhelming evidence that shows employees gain satisfaction and pleasure from work that has a purpose and is rewarding, both emotionally and financially.

What many management teams still fail to grasp is that making work more rewarding is often more about visible leadership, caring managers and colleague relationships rather than hard cash or happiness shocks.

What impacts employee happiness?

Here are 7 simple considerations that have a big impact on how an employee feels about their work, each other and themselves:

– Am I trusted and respected by my boss?
– Do I feel there’s a low sense of hierarchy where my ideas and suggestions matter?
– Can I positively express my own thoughts and feelings about a colleague’s work through recognition?
– Do I feel my own work and commitment is recognised?
– Is the company and its management honest and transparent with me?
– Can I see how my work is linked to the objectives and success of the company?
– Can I be myself at work?
– Can I prioritise my family and friends when I need to?

All too often HR focuses on tangible reward and happiness shocks as the route to providing employees with a rewarding and happy workplace. And of course they matter. But if they exist in an environment that doesn’t have the day to day ‘happiness’ basics in place, they can often create a culture of ‘take’ or be regarded with resentment and cynicism by employees.

Instead, concentrate on getting the things that really matter in place first, before wasting valuable time and money on shock treatment.