Productivity: It Might Just All Come Down To Happiness

Researchers have found a positive correlation between employees' happiness, productivity and even sales.  Could it be that one key success factor, often underestimated, is employees' satisfaction?

Here are the facts:
  • A Gallup study found that retail stores whose employees scored higher in "life satisfaction" generated $21 more per square foot of store space (
  • University of Warwick's Andrew Oswald found that happier workers were 12% more productive. Unhappier workers were 10% less productive (
  • Harvard Business Review article: “Creating Sustainable Performance.” notes that happy employees were 16 percent more productive than their peers.
Depending on the methodology the results might show slight variations.  However, the essence is that happier employees are notably more productive.  So the key question becomes: how do you make sure that your employees are happy?

Most managers would argue that the best way, if not the only way, to improve satisfaction is to increase compensation packages including salaries, bonuses, health insurance, vacation days, and other financial benefits.  It turns out that once an employee deems its compensation on par with the market average, any change in its level has a little and only temporary effect on his or her satisfaction and happiness at work. 

Instead all business owners should consider the following environmental measures:
  • Decision Making Responsibilities - Employees that feel that their work, their decisions, make a difference, are more satisfied with their workplace.  Getting them involved in the decision making process and assigning them responsibilities, gives employees a sense of ownership and increases their engagement and their desire that the company should be successful. 
  • Transparency - A higher level of transparency also increases staff engagement.  Employees that are aware of every aspect of their company can understand better management decisions and are not subject to the frustration that sets in when unexpected policies are set up.
  • Performance Feedback - Acknowledging high performance and supporting progress is a key factor in employee satisfaction.  Everyone appreciates being called out for an outstanding contribution to the company's goals.  Additionally, realizing that progress is celebrated pushes employees to continually strive to reach higher goals.
  • Positive Corporate Culture - According to Shawn Achor, author of "The Happiness Advantage", happiness can be habitual and is essentially the effect of positive thought-process.  He maintains that being positive to others, makes us more positive and in turn happier.  He suggests that companies should foster the habit of having each employee compliment or write a positive message to a co-worker every day.  Companies should also ban abusive and derisive behaviour between co-workers.   
  • Flexibility - Flexible work schedules can increase employees' satisfaction as it improves their work-life balance.  Managers should listen carefully to their staff and try to design a mutually beneficial schedule.
All of the above measures entail a small investment that any retailer can afford.  However, in some instances they require a radical change in management and leadership.  What is certain is that the results stemming from an increase in employees' happiness might be too impressive to ignore.

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