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Pay and benefits are not enough when it comes to employee satisfaction. Alexander Kjerulf FRSA argues that employers also need to make their staff happy.

Pay and benefits are not enough when it comes to employee satisfaction. Alexander Kjerulf FRSA argues that employers also need to make their staff happy.

Unhappy employees cost companies dearly. According to a University of Florida study, published in the January 2006 issue of the Journal of Applied Psychology, employees start to misbehave when they are angry at work, dislike their jobs, or believe their supervisors are unfair. Bad behavior includes gossiping, pilfering, backstabbing and avoiding work by taking excessively long breaks.

And this is not only the case for a few malcontents and complainers; even model employees and star performers turn bad when they are not happy at work. So not only are unhappy employees unmotivated and disengaged, but many of the people who would be exemplary employees if they were happy will actively work against the company’s interest to get back at it when unhappy.

On the flip side, happy employees are not simply in a better mood, they also do a much better job. Studies from psychology and neurology have shown that people who experience positive emotions experience a number of benefits at work: they are more productive and work faster and more efficiently; they get sick less often and have much lower absenteeism rates; they are more creative and have more and better ideas; and they stay at the company longer saving huge efforts in recruiting new people. Those in sales roles sell more. Further more, happy employees make customers happier and more loyal.

All of this means that happy companies on average are more profitable and have higher growth rates and stock prices than the market average. Why should this be? There are three main reasons why happy companies are more successful.

First, happy organisations are more innovative. Harvard Professor Teresa M. Amibile’s research into how the work environment influences the motivation, creativity, and performance of individuals and teams shows that happy people are more creative. If people are in a good mood on a given day, they are more likely to have creative ideas that day, as well as the next day, even if we take into account their mood that next day. There seems to be a cognitive process that gets set up when people are feeling good that leads to more flexible, fluent, and original thinking. There is even a carryover, an incubation effect, to the next day.

The Gallup Management Journal agrees. It found that 59% of happy employees strongly agreed with the statement that their current job “brings out their most creative ideas,” compared with only 3% of unhappy employees. So if innovation and creativity matter to your business, you need happy employees.

Second, happy people are more motivated.  Every leader wants motivated employees. Every employee wants to be motivated. And yet we often see managers complaining that their employees are impossible to get going, and workers complaining that their managers don’t motivate them and don’t know what makes them tick. It is not the job of the manager to motivate employees. That is impossible. It is a manager’s job to create a happy work environment in which employees are naturally motivated. Think about it: how difficult must it be to motivate people who are dissatisfied, disappointed, distrustful, disengaged and unhappy at work.

An article from Harvard Business School put it like this: “Most companies have it all wrong. They don’t have to motivate their employees. They have to stop demotivating them.” Happy employees need no external motivation, they motivate themselves and each other, and this internal motivation is both more efficient and more sustainable than the external motivation (such as rewards) that managers of unhappy employees must resort to. If you want true motivation in the workplace, you must create a happy workplace.

Third, happy employees deliver better customer service. A Harvard Business Review article concluded that: “When companies put employees... first, their employees are satisfied, their customers are loyal, their profits increase, and their continued success is sustained.” Good, genuine customer service comes only from happy employees. Unhappy employees can try to fake it, but it will be just that and most customers can tell.

The stats are a little strange on this one: one happy employee can give 10 customers a good experience but 10 unhappy employees cannot give one customer a good experience. What they can do is give 100 customers a bad experience.

So what makes employees happy at work? Most leaders and companies seem to think that raises, bonuses and perks are the way to a happy motivated workforce, but research shows that what really makes us tick are two completely different things, namely results and relationships. Results means being good at your job and doing work that is meaningful to you. Relationships means liking the people you work with and feeling that you belong in the workplace.

Interestingly, almost any organisation can offer its employees results and relationships. You may not have the budget to introduce a new million-dollar corporate gym, but you should definitely make sure that every single employee has everything they need to do a great job, has a clear appreciation of why their efforts are meaningful and knows that they are liked and appreciated for who they are.

So research clearly shows that companies should embrace happiness because it is good for business. But there is one other, even more fundamental reason: making people happy is good, making them unhappy is just, plain wrong.

There are workplaces out there that run their people down, make them stressed and ill, destroy their sense of worth, are havens for bullies, and allow all kinds of harassment. Though it is rarely intentional, these workplaces still make their people unhappy, and mentally and physically ill.

I have no idea how leaders and managers of these businesses can live with themselves. They may hide behind the old argument that companies should only care about money, or, as Milton Friedman said it: “The business of business is business.” This is a false argument because happy businesses make more money. There is no longer any excuse for tolerating an unhappy work environment, when it is just as easy to create one that is inspiring, uplifting, healthy and happy.


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