Should you care if your employees are happy?

by Jun 6, 2019Leadership, Managing People & Organizations, Performance Management

There is such a thing as the Global Happiness Report, and it was released at the World Government Summit earlier this year. Among other things, it notes that in the workplace, employee happiness has a marked impact on productivity, and companies with higher levels of employee well-being tend to do better in terms of stock market performance and growth. It makes a compelling business case for promoting worker wellbeing and employers should pay attention.

Shot of young designers working in a modern office

While it’s not news that higher levels of wellbeing – in terms of job satisfaction – is associated with higher morale and thus productivity, what is new is the recognition that an employee’s emotional state at work can drive performance. This concept is based on the Emotion theory that suggests higher levels of positive emotions will lead to better performance when it comes to creativity, interpersonal tasks and decision making.

So, what does this mean, practically speaking, and should happiness be a responsibility of employers?

Are your employees happy?

While they certainly don’t bear 100% of the responsibility, employers do play a role in supporting an employee’s happiness. To a certain extent, the business’ success depends on it, given that employee wellbeing ultimately has an impact on your bottom line. A look at the business indicators will often reveal whether something is amiss – or whether improvements can be made. If your company is not meeting its key performance goals or achieving your strategy, if turnover is high, recruitment efforts are difficult or customer loyalty is low, then there’s likely a problem you need to address.

Employees need to connect with their co-workers and this requires time for social interaction. They need adequate vacation time, a supportive environment, resources to effectively do their job and, ideally, autonomy over their schedule. All of this is determined by the culture that an employer dictates, which always comes from the top.

For example, if a leader is miserable and doesn’t communicate or engage with anyone beyond the executive team, doesn’t care about his/her employees or tolerates toxic behaviour, this will permeate across the organization. Furthermore, people pay attention to what you do, not what you say, and will spot a discrepancy between the two. A CEO or manager who espouses work-life balance yet sends emails after working hours is signalling to employees that they are expected to respond right away. If you never take time off or work through lunches, if you don’t champion wellbeing or provide a supportive environment, employees will notice and believe that is what is expected of them.

People who aren’t happy at work are only doing the bare minimum or enough to get by. By contrast, the report shows that a “meaningful increase in well-being yields, on average, an increase in productivity of about 10%.” What’s more, positive emotions lead to higher levels of creativity and cognitive flexibility – meaning happy employees have a greater number of diverse thoughts and ideas that contribute more value to the business.

What you can do

Having the right culture in place is a good starting point, but happiness isn’t just defined by table tennis in the lunch room. A benchmarking survey can establish a baseline of happiness and tease out areas for improvement. These can be repeated at intervals to measure the impact of any new strategies that have been implemented. Use questions that point to factors of wellbeing, such as: “what opportunities exist to connect with your co-workers?”, “do you feel you are appropriately recognized for your contribution to your department?”, and “do you feel you have an adequate work/life balance?”

Employers can look to the top small and medium employers (SMEs) in Canada who are leading the way when it comes to HR innovation and alternative work options. This includes a holistic approach to employee wellbeing, everything from financial counselling, career development and flexible health plans to maternity and parental leave top-up payments. Additional initiatives to consider include:

  • Wellness programs – These can be very effective, and many don’t have a large price tag attached. It can be as simple as lunch and learns on health topics, yoga classes, or even access to online tools that address a wide range of mental and physical issues that can negatively impact performance. These programs indicate an interest in your employees’ wellbeing.  It is important that the executive(s) participate in the wellness activities to tangibly demonstrate their commitment, otherwise it’s an empty gesture. 
  • Policies for work-life balance – It’s critical to implement – and champion – wellbeing. Jobs are designed to be done during a regular 8-hour workday, without requiring consistent overtime. Make sure that employees use their vacation time. Assuming someone is already well or fairly compensated, increasing their salary is not the only lever for adjusting happiness and works only in the short term. Respecting the need for employees to have adequate downtime does more to impact employee well being in the long term.
  • Employee recognition – Good communication and involving employees as much as possible are best practices that contribute to their sense of purpose in the organization. Ensure a good match between their skills and the work they do, and how it aligns to the overall company purpose. Implement robust, authentic recognition programs that show you value their contribution. Such practices must be authentic otherwise employees will perceive them to be manipulative.

I have seen the impact of employee happiness on company performance in practice. One client I worked with had an ineffective management team that did not display good work behaviours, which created an unpleasant work environment that resulted in poor financial performance. When that team was removed, those who stepped up into the roles had better attitudes, better work ethic and better relationships with staff. It quickly became obvious that employees were more relaxed, happier and had more clarity around their roles. Firm profitability and employee productivity went way up very quickly with virtually no turnover. In another organization, we adopted a focus on results which included a flexible work schedule, telecommuting and an unlimited vacation policy.  Far from being taken advantage of, our biggest problem that has resulted is that we have to chase people to use the time off.

Ensuring employee happiness doesn’t mean giving them everything they want. It means providing the tools, resources and environment in which they can do the best job they can, recognizing their contributions and having adequate supports in place to enhance their wellbeing. The ROI is the happy result on your bottom line.  

This article was originally published on and it has been republished with permission.


Authors profile:

Janet Candido

Janet Candido combines strong business and HR skills to help organizations achieve their strategic goals. Janet is a creative problem solver with over 20 years in the Human Resources field. She is an authority on workplace systems and culture, and applies her expertise to provide innovative solutions for clients. Her goal is to help organizations, executive teams and their employees reach optimal performance, applying business knowledge to assist organizations address their HR needs.

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