Workplace happiness increases productivity and turnover

I'm sure you've heard that job satisfaction increases productivity. However, until recently this was not at all clear-cut. Numerous studies showed that happiness and productivity often went hand in hand, but not which of the two was the cause and which was the result. Does a feeling of happiness make people work harder? Or does it make employees who work harder happier?

Earlier this year, new research by Erasmus University gave the answer to this question1. As a result, employees who are happy are more productive than their less fortunate colleagues. This is an interesting fact, because it means that increasing job satisfaction is both socially and economically important. In this article we discuss what these findings mean in practice and how you can make use of them within your organisation.

Workgroup luck pictured: Cheerful employee behind his desk.

Definition working luck

Before we go into the research and practical implications, it is important to consider what the term 'job satisfaction' actually means. Workplace happiness corresponds to a large extent to employee satisfaction. The big difference, however, lies in the emotion. In the scientific literature, happiness at work is defined as: 'The predominance of positive emotions at work and the perception that the work contributes to expressing and developing the potential.2

British Telecom research

The investigation in question was carried out at British Telecom, a large telecommunications organisation in the United Kingdom. Within British Telecom, an industry was chosen in which productivity was already measured in a very structured way before the investigation: the call centres. A record was kept of how many calls each employee made in a day, how long they lasted and whether pre-set sales targets were achieved.

British Telecom has 11 call centres employing a total of 1800 sales staff. For 6 months each of these employees was measured weekly on both the level of happiness and productivity. In this way the happiness data could be linked to the number of sales they made. How many more sales does a lucky salesman realize on a weekly basis than his less lucky colleagues?

Measuring Workplace Happiness with Pulse Survey

Usually, job satisfaction is measured by means of an extensive employee satisfaction survey. But because in this survey, job satisfaction had to be measured on a weekly basis, a long questionnaire was not feasible. The chance that employees would participate in the survey every week would be very small in this way. A very short questionnaire was therefore chosen. pulse survey. Employees only received one question in their mailbox each week: How lucky are you this week on a scale of 1 to 5? Because participation in the research took little time, a Response rate of 80%.

Cause - effect

The aim of the research was to find a causal link between job satisfaction and productivity. In other words: is work happiness a cause of productivity? This would mean that when working happiness is increased, productivity increases as a result. In order to answer this question, it was important that job satisfaction was varied. For example, you would do this by having everyone watch a feel-good film before work, but that obviously takes up a lot of valuable time. The researchers therefore opted for a natural influencer of happiness: the weather. There is a lot of evidence that the weather clearly influences people's feeling of happiness. When the sun shines, people are generally happier than when it rains. In certain weeks it rained at some of the 11 call centre locations, while at other locations it was sunny. The expectation was that the employees at the sunny locations would sell more than the employees at rainy locations.

More job satisfaction leads to 24% more sales

Researchers found that when an employee went one step up on the 5-point happiness scale, sales increased by 24%. Because the weather had been used as a predictor of happiness, it could be established that work happiness was the cause, and productivity was the consequence. This is the first time that the effect has been found in a work setting.

Although this effect had never been found in a work setting before, there are several examples of studies in a controlled environment3. In these experiments, happiness is increased by, for example, watching a funny movie or eating something tasty, after which the test subject is asked to perform a simple task. The results of the research at British Telecom correspond with this.

How is it that job satisfaction increases productivity?

It is interesting to speculate on the reason that happiness increases productivity. Are happy people more motivated, so they work more hours and therefore sell more? Or do happy people spend the same number of hours on their work, but do they work faster, harder or smarter? The research showed that the latter is the case. People don't work anymore, but simply get more done in the same time.

Exactly where this is coming from? We haven't had the last word on that yet. The researchers think it can be explained by better regulation of emotions. As a call centre employee, you have a lot of contact with other people, and it is important to communicate with them in the right way. When you are happy, you can feel the other person's emotions better and regulate your own emotions better. This makes people more likely to trust you, which is good for sales. This would mean that the found effect of job happiness only applies in jobs where there is a lot of human contact. More research is needed to establish that job satisfaction also increases productivity in other job groups.

What does this mean in practice?

The link between happiness and productivity unites the interests of employees and employers. Employees want to go through life as happily as possible, while employers also have an economic interest. Creating the best possible work situation for the employee will therefore not only make him/her happier and more appreciative of the employer. Beneath the line, it will also ensure an increase in turnover. But how do you do that?

Increasing job satisfaction is important, but complex. Of course, there must be a balance between what it costs employers to increase job satisfaction and what it yields through extra productivity. In order to ensure that changes in work situation have the desired effect or level of happiness, it is important to involve employees in the development of new policies. In small organizations, this can be done simply by getting together. In larger companies, online Staff Research a better option. Regardless of the method, it is important to find out what makes employees unhappy or happy in their current work situation. By responding to points for improvement, employee satisfaction can be increased.

Major fortune enhancers

Which measures increase job satisfaction depends to a large extent on the sector, the type of company and the position of the employee. It is therefore important to tailor measures to the needs on the shop floor. Nevertheless, there are a number of overarching elements that apply in almost every work situation.

1. Autonomy

People want to feel the freedom to carry out their work as they see fit. If you look at the example of call centres, you can see that there is a lot of room for improvement in this industry. There are strict guidelines on how long a call may take, what needs to be said and how many sales need to be made in a day. It could have a significant effect on the job satisfaction of call centre employees if, for example, they are allowed to choose their own words or if they can decide for themselves how much time they need to make a sale.

2. Working atmosphere

People are social beings, and spend a large part of the week at work. In our employee surveys, we see that one of the most important factors for satisfaction is the dealing with colleagues and supervisors is. So a nice working atmosphere and room for conviviality is important for job satisfaction. By engaging in conversation and giving employees the opportunity to express their views on what is and what is not going well, you involve them in decisions. This benefits the working atmosphere.

3. Work-life balance

Everyone wants to be able to combine his or her work with his or her private life. Flexibility is therefore very important. Working from homeThis is an example of ways in which the work-life balance can be improved. In this way, job satisfaction, and thus productivity, can be increased.  

Conclusion

Both the employee and the employer have an interest in increasing job satisfaction within the organisation. An increase in job satisfaction leads to an increase in productivity, and therefore turnover. Because increasing job satisfaction is a complex matter, it is important to enter into a dialogue with employees. For example in the form of an anonymous Employee Satisfaction Survey. In this way it can be determined in which areas within the organisation there is room for improvement in employee satisfaction. By adjusting the policy on the basis of the results of the survey, job satisfaction is increased. This leads to an increase in productivity, which in turn leads to an increase in turnover.

Sources

  1. Bellet, C., De Neve, J. E., & Ward, G. (2019). Does Employee Happiness Have an Impact on Productivity?Saïd Business School WP13.
  2. Sousa, J. M. D., & Porto, J. B. (2015). Happiness at work: Organizational values and person-organization fit impact. Paidéia (Ribeirão Preto)25(61), 211-220.
  3. Oswald, A. J., Proto, E., & Sgroi, D. (2015). Happiness and productivity. Journal of Labor Economics33(4), 789-822.

20 April 2020

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