5 studies showing how employee happiness and business performance go hand in hand

This week is International Week of Happiness at Work. Is your business taking time to consider employee happiness and the organization’s impact on how happy employees feel? In fact, do you have a view on precisely what happiness even is? There are various definitions out there.

In general terms, however, it seems to be about an ongoing emotional state or mood: one where attaining an overall equilibrium in life is achieved by having positive thoughts and feelings most of the time.

Obviously, no one’s exempt from having problems and tough periods in their lives but an ongoing sense of positivity can help with handling and overcoming the difficulties.

Even if a week dedicated to happiness in work isn’t your thing, it’s still worth asking yourself whether happiness in the workplace is something your organization should be paying more attention to.

From an ethical viewpoint, caring about how your employees feel is clearly the right thing to do. Yet it goes beyond that. Evidence is revealing that there’s a business case to be made about why it matters; here are five studies that help to explain why employee happiness is such an important factor for achieving company success.

Happy workers are more productive

Every business strives to be as productive as possible – which is why they should be looking closely at the research that’s telling us that happier workers tend to be more productive.

In a study conducted at the University of Warwick, three different styles of experiment were conducted where randomly selected individuals, who were made happier by various interventions, exhibited around 12% higher levels of productivity.

The research also discovered that lower happiness levels reduced productivity, leading the researchers to conclude there’s a causal link between happiness and performance.

Companies are more likely to retain happier employees

Any business that wants to be successful knows it has to hold on to its key employees. And while a small degree of overall turnover can be healthy for a business, the costs associated with the loss of expertise coupled with having to recruit and train up new employees can become significant.

So what can you do to encourage employees to stay with you for longer?

Happiness has a role to play here with research suggesting the more satisfied and happy an employee feels, the less likely they are to leave their employer. Even better, this relationship grows stronger over time.

Happiness is a powerful motivator

For employees to perform at their best, they need to be engaged and motivated. This study looked at what lay behind individuals’ sense of motivation to commit their time and invest effort when they were trying to achieve important goals. What was it that enabled them to persist, even when faced with challenges and obstacles?

The research revealed that when the individuals felt happy they exhibited greater levels of motivation, partly because of their positive view that they had control over attaining the goals they were working on.

Happy leaders are more transformational leaders

We all know how critical the role of the leader is for business success but does their happiness in the workplace have any impact on the organisation? Yes – research suggests it does.

A study of 357 managers looked at how leaders’ positive mood states linked to transformational leadership and confirmed that leaders who experience more positive affect at work are indeed more likely to be transformational within their company.

Happiness promotes workplace and career success

It used to be assumed that people were happy because they were successful at work. This study, however, asked this question: are people actually successful in work because they are happy?

The researchers gathered in evidence from cross-sectional, longitudinal and experimental studies that all examined the impact of happiness on a whole range of work outcomes.

Read more: Could employee recognition support workplace wellbeing?

They found that not only was happiness correlated with workplace success and optimal functioning in work, but frequently happiness preceded them both.