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Employee Happiness and Business Success Are Linked, Study Finds (economist.com) 125

Posted by BeauHD from the connecting-the-dots dept.
A new study (PDF) by Christian Krekel, George Ward and Jan-Emmanuael de Neve finds a link between employee happiness and business success. "The study, based on data compiled by Gallup, a polliging organization, covers nearly 1.9 million employees across 230 separate organizations in 73 countries," reports The Economist. From the report: The authors studied four potential measures of corporate performance: customer loyalty, employee productivity, profitability and staff turnover. They found that employee satisfaction had a substantial positive correlation with customer loyalty and a negative link with staff turnover. Furthermore, worker satisfaction was correlated with higher productivity and profitability. Of course, correlation does not prove causality. It could be that working for a successful firm makes employees more contented, rather than the other way round. However, the authors cite studies of changes within individual firms and organizations which seem to show that improvements in employee morale precede gains in productivity, rather than the other way round.

What might explain the link? One school of thought, known as human relations theory, has long argued that higher employee well-being is associated with higher productivity, not least because happy workers are less prone to absenteeism or quitting. However, as the authors of the paper admit, there is very little research on the best measures that managers can take to improve employee well-being, or indeed which are the most cost-effective. Rather like the judge's famous dictum about obscenity, a well-run company may be hard to define but we can recognize it when we see it. Workers will be well informed about a company's plans and consulted about the roles they will play. Staff will feel able to raise problems with managers without fearing for their jobs. Bullying and sexual harassment will not be permitted. Employees may work hard, but they will be allowed sufficient time to recuperate, and enjoy time with their families. In short, staff will be treated as people, not as mere accounting units.
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Employee Happiness and Business Success Are Linked, Study Finds More

Employee Happiness and Business Success Are Linked, Study Finds

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  • Most behemoth companies are filled to the brim with unhappy employees, or at least that's what I see everywhere.

    And what in the world is a "polliging organization"???

    • Comment removed based on user account deletion

      • Re: (Score:1)

        by Anonymous Coward

        Is Porche one of these "polliging" organizations? Never heard of them.

    • Re: (Score:3)

      by Kokuyo ( 549451 )

      Corporations of that size are outliers and statistically irrelevant. Those are quasi monopolies and as such are not playing under the same rules as most companies.

      Studies like this one are not meant to tell Microsoft, Oracle, Apple, Amazon or Walmart that they could do better with happier employees. They're saying if you are building a company, you might want to keep this in mind to better your chances of success.

      • Corporations of that size are outliers and statistically irrelevant. Those are quasi monopolies and as such are not playing under the same rules as most companies.

        Studies like this one are not meant to tell Microsoft, Oracle, Apple, Amazon or Walmart that they could do better with happier employees. They're saying if you are building a company, you might want to keep this in mind to better your chances of success.

        I can't find anything obvious in the paper to support that view, the employee data was collected by Gallup poll. How did you reach that conclusion?

    • Since behomoth is not synonymous with successful you have no point. It also states something obvious ... there is a link. It doesn't say every employee at successful companies is happy. Finally, you are an idigiot.

  • No problem (Score:5, Insightful)

    by lucasnate1 ( 4682951 ) on Wednesday July 31, 2019 @05:09AM (#59016400) Homepage

    Consumerist society is already a miserable place, constantly telling you that the only way to fulfill yourself is your job, breaking communities and Families in the name of "individualism". When you make sure people have nothing outside of work, then surely work will become the happiest thing in their lives.

    • Re:No problem (Score:5, Insightful)

      by Ol Olsoc ( 1175323 ) on Wednesday July 31, 2019 @09:24AM (#59017214)

      Consumerist society is already a miserable place, constantly telling you that the only way to fulfill yourself is your job, breaking communities and Families in the name of "individualism". When you make sure people have nothing outside of work, then surely work will become the happiest thing in their lives.

      You are on the right path there. As a microcosm of the overall issues, DDG "women are more unhappy than ever", and you will be deluged with hits. As now just more members of the workplace, and having made "incredible progress" over the years, more and more are on drugs for mental illness.

      It is like someone told the mass of women that true happiness is having a career. And they bought into it

      One thing is for certain - it wasn't a man. Thoreau was correct when he wrote: "The mass of men lead lives of quiet desperation."

      I use the present state of Western women not as singling them out, but because of the massive amount of data available. Many men as well as women have fallen into the trap of thinking that if they aren't happy to the point of euphoria 24/7, they need medical intervention and someone to blame their lack of euphoria on.

      And yet with all that there are (apparent) outliers such as myself that understand both that a certain sense of satisfaction rather than euphoria is actual life happiness, and that it is very possible to really enjoy your employment.

      Now watch the reaction and hate that last sentence receives. As if so many people have embraced their unhappiness, and cannot imagine not hating their career.

    • Re: (Score:2)

      by Cederic ( 9623 )

      Alternatively you could take the perspective that while leisure, family and other non-work activities are the things in your life that make you happiest, there's no need to let work be shit anyway.

      You might prefer to not have to work but you can still find a job you enjoy and be happy during the time you spend doing it. Why choose anything else?

      • Work is not so shit, as much as it tries to suck all of my time. I managed to escape, but I see others who either didn't or have submitted by choice because of the loneliness in their lives.

        I'm every startup that I worked for, there were these few lifeless people who worked much more than the others, who acted as a backbone to the company. I really feel like our economic system depends on there being enough such lonely people.

  • I knew several people who worked for HP in various countries, back around the time Carly Fiorina took over. All of them had been really happy to be there and were very positive about the company. I changed jobs myself around that time, moved and lost touch with most of them but the one I remained in contact with changed her tune dramatically while Fiorina was in charge. No idea what the situation is nowadays.
    This study would imply Fiorina was part of the problem and I really don't know enough about what

    • I think everyone could see that Fiorina was part of the problem. Of course that is not how she and the board that appointed her spin it. Things go well = "I did that". Things go badly = "The market was against us" (also note how they attribute success to themselves individually, but failure is a team effort)
    • During the time of Fiorina, we stopped buying from HP. We have never begun again.

      This was also my experience of HP employees before Carly Fiorina [wikipedia.org] became CEO in 1999: "All of them had been really happy to be there and were very positive about the company."

    • Re:Thinking of HP (Score:5, Informative)

      by thomst ( 1640045 ) on Wednesday July 31, 2019 @08:33AM (#59016994) Homepage

      Vlad_the_Inhaler reminisced:

      I knew several people who worked for HP in various countries, back around the time Carly Fiorina took over. All of them had been really happy to be there and were very positive about the company. I changed jobs myself around that time, moved and lost touch with most of them but the one I remained in contact with changed her tune dramatically while Fiorina was in charge. No idea what the situation is nowadays.

      Sadly, Fiorina's tenure marked an abrupt, unfortunate, and permanent change in management philosophy at H-P. Before her, the company was mostly run by members of the Hewlett and Packard families. By the time she was replaced (by Mark Hurd), the founding families' shares had been so diluted that the board of directors was now firmly in the hands of MBAs. Bill Hewlett's "management by walking around" philosophy had been completely erased at the executive level, and replaced with the MBA-standard "management by spreadsheet" model wherein it's a matter of faith that "all companies are essentially the same," so it isn't necessary for upper management ever to have to mingle with the hoi polloi on the floors below the executive suite. If it can't be quantized and modeled, it can't be important, anyway - so it's okay to treat even your most productive employees as strictly replaceable, totally interchangeable units, to treat your customers as wallets with legs, and to treat your sales and marketing staff as the most important and valuable assets of the company (while continuing to treat the individual employees of those departments as interchangeable, trivially-replaceable commodities).

      With that change, there also came the stacked ranking employee review policies and all the other nonsensical, counter-productive, and dehumanizing baggage you get when a company is infested with MBAs. H-P then swan dived from consistently placing in the top three most desirable tech companies at which to work (and usually at # 1) to a rank well down into the bottom half of that list.

      Its management philosophy hasn't changed since ...

    • I believe I remember the time when it was announced that Fiorina was forced to resign, people started hijacking threads here on slashdot about dancing on tables etc. Investors were also happy and the stock jumped.

  • Comment removed (Score:5, Insightful)

    by account_deleted ( 4530225 ) on Wednesday July 31, 2019 @05:26AM (#59016436)
    Comment removed based on user account deletion

  • employee happiness and business success both feed into eachother.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by tlhIngan ( 30335 )

      employee happiness and business success both feed into eachother.

      Makes sense. An employee motivated by work will put out better quality work. If it's a customer focused position, that generally means the customer gets a better experience. Customers that get better experiences generally return and bring in new customers. And unless some primary business metrics are wrong (e.g., you aren't able to make a profit with what you're providing the customer), this leads to increased profits and money all around.

      Of c

  • so... (Score:1)

    by Anonymous Coward

    people in successful companies are happier?
    Shocker.

  • Unionised workplaces? (Score:1)

    by Anonymous Coward

    The summary pretty well describes what it's like to work in a unionised workplace. When workers have their integrity & dignity better protected & supported, they tend to be less overworked, less exhausted, & less worried about their health, job, & financial security. But then 'Murica hates unions. Does that mean they hate themselves?

    • Re: (Score:1)

      by Anonymous Coward
      Unions are fundamentally flawed in that they promote seniority above all else. Fuck talent, skill, or merit. Someone who has been there longer gets promoted first. Joe Smith is coming to work drunk and almost kills a few people. Can't fire him, he's protected by the union. And yes, this is real. Local mill has this problem and the only way it can get rid of its day drinkers is to offer them gobs of money if they quit.

    • Re: (Score:2)

      by Cederic ( 9623 )

      Last unionised place I worked, I had four people in a month tell me not to kill myself.

      I'm not sure I was happy there.

  • However, as the authors of the paper admit, there is very little research except for decades of studies and surveys, and countless journal articles, across the disciplines of HR, business psychology, economics, game theory, acoustical engineering, interior design, ergonomics, leadership theory, etc. on the best measures that managers can take to improve employee well-being, or indeed which are the most cost-effective

    FTFTFA

  • Stress (Score:4, Insightful)

    by Anonymous Coward on Wednesday July 31, 2019 @06:19AM (#59016588)

    If you think working for a growing company is stressful, try working for a failing one.

  • Causal direction? Both ways. (Score:5, Informative)

    by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Wednesday July 31, 2019 @06:29AM (#59016606)

    My last gig lasted 4 weeks, because my boss was nice in private but a total douche at leading and his software pipeline a total mess.
    Now I'm once again happyly in a company that isn't complete shite. Result? I work overtime to optimise my tooling and knowlege and an interested in bringing the companies core platform and softwareproduction forward. I get paid according to my skills, experience and work ethic and people are grateful that I'm here to help the team out. This is way to rare and it feels like a drink after a 50km desert marathon.

    Bottom line:
    Shit in, shit out. But be fair and nice and magic happens. This isn't really news, or?

  • Seemingly obvious, but not so much (Score:4, Interesting)

    by ErichTheRed ( 39327 ) on Wednesday July 31, 2019 @06:55AM (#59016664)

    You'd be forgiven if you dismissed this as another case of obvious science. an academic trying to publish as much as possible to get tenure, etc. But, given what's happening in the world of employment these days, I think a study linking these factors is what's needed. After all, look what happened with open-plan offices...everyone cargo-culted Google and now nearly every office is an open warehouse loft with 20 foot ceilings and zero privacy...and only now are people starting to study whether that's not the best thing for everyone. Large businesses don't do anything their management consultants don't tell them to do, and these management consultants are supposed to be on the "cutting edge of management science."

    It's also worth noting that employee happiness is different for everyone. My employer is a very old-school workplace, not many perks beyond office privacy and free coffee. But, I'm mid-career at 44 years old. I'm happy when I have interesting work to do, minimal levels of BS, decent pay, and not chained to the office 24/7. I'm done with the 80 hour week grind...it doesn't get you anywhere. Someone just out of school with no family or outside responsibilities wouldn't be attracted to our workplace as much as they would a startup. They're more into the "all inclusive" workplace, where it just consumes your life and you live at work. They want free meals, free beer, ball pits and nap pods in the office.

    That said, no matter what the employees want, if the environment sucks they won't perform at their best. A lot of people love to dismiss employees as being too sensitive or snowflake-y when they complain about a truly toxic work environment. But, it really does set the tone for everyone. One "rockstar" diva employee who's allowed to get away with ASD-level inappropriate behavior will mess up the work of their colleagues. Same thing with jerk bosses, or managers promoted into the position who can't actually manage. Companies are groups of people when it comes down to it and if they don't at least row in the same direction, expect bad results. They don't have to love everyone or everything about the workplace, but they have to be motivated enough to put in the effort.

    • Comment removed based on user account deletion

    • Re: (Score:2)

      by dgatwood ( 11270 )

      You'd be forgiven if you dismissed this as another case of obvious science. an academic trying to publish as much as possible to get tenure, etc. But, given what's happening in the world of employment these days, I think a study linking these factors is what's needed. After all, look what happened with open-plan offices...everyone cargo-culted Google and now nearly every office is an open warehouse loft with 20 foot ceilings and zero privacy...and only now are people starting to study whether that's not the best thing for everyone.

      I think anybody who has ever worked in both open-plan and private-office environments knows that open-plan workspaces are a disaster. The problem is, businesses also want to attract talent, and the bulk of the CS talent in the U.S. (statistically) lives in the Bay Area, where the cost per square foot is extortionate. As a result, there's a strong financial incentive to have open-plan offices, because you can squeeze in 2–4x as many people per square foot.

      What the cargo cult doesn't recognize is that

      • "The funny thing is, you can have both free meals/beer/ball pits/nap pods *and* a decent work-life balance. You just have to find a big employer that still cares enough about its employees to treat them right. They exist. :-)"

        Where? I thought the zany perks designed to keep you working as much as possible were the domain of companies that basically want your soul (Amazon, Apple, Microsoft, Google, Facebook, Netflix, etc.) I doubt any employer willing to shell out for new-grad-entrapment-devices would be wil

        • Re: (Score:2)

          by dgatwood ( 11270 )

          "The funny thing is, you can have both free meals/beer/ball pits/nap pods *and* a decent work-life balance. You just have to find a big employer that still cares enough about its employees to treat them right. They exist. :-)"

          Where? I thought the zany perks designed to keep you working as much as possible were the domain of companies that basically want your soul (Amazon, Apple, Microsoft, Google, Facebook, Netflix, etc.) I doubt any employer willing to shell out for new-grad-entrapment-devices would be willing to let its workers go home and see their families. How else do you explain entire new classes of cloud services emerging from AWS and Azure every single week?

          Most of those companies have highly variable work-life balance, ranging from great to terrible; it depends heavily on the team/org that you end up in. The key is to evaluate the team, and transfer to a different team if yours is soul-sucking. Also, it helps to pick a company that makes internal transfers easy (e.g. Google, Microsoft, Facebook) and not one where you basically end up interviewing from scratch (Apple, possibly Netflix).

  • Investors already know this (Score:3)

    by CGordy ( 1472075 ) on Wednesday July 31, 2019 @07:18AM (#59016710)
    Glassdoor is commonly used by investors for this very reason, because employee morale is a good indicator of whether a company is well managed or not.

  • Seriously? They had to have a study to tell us the obvious?

    • Re: (Score:1)

      by Anonymous Coward

      Somebody had to write it down so the MBA's can pick it up six years from now and be utterly shocked.

  • Generally researches like these are meant show how one activity or some way of doing can change the whole scenario, so is this research based on. In corporate or office life if one get the appreciation or the appraisal and incentive for their work, they ultimately get motivated & provide best outputs. So, Indeed when an employee feel content & satisfied with its companies services & facilities, he/she will always do more productive work which will ultimately increase the company's profit. So,

  • There has been ton of research on this, from many big name schools across multiple disciplines. This also make logical sense.
    If I am happy as an employee, I am willing to do the little extra, feeling free to contribute more. Then if I am unhappy, then I am going to do the bare minimum or just enough to get what makes me unhappy off my back.

    But the people in Authority are also often on a Power Trip too. So they are more involved in making them look good vs caring about the "Little People", and generally as

  • While it is a nice to have scientific confirmation, it is not at all unexpected that such is the case.
  • ... It is why I have always treated those on my teams differently than most managers. A corollary: happy customers spend more money with you, something the cable companies should learn.
  • Private offices. Open Plan is a fucking DISASTER. Just ditch it, your employees will collaborate 1000% better. At the very least try to break up your divisions into smaller groups with dedicated offices. There's nothing worse than some jackass humming away in an open plan space making everyone less productive. The best time I ever had in ICT was working as a Network Administrator in a Jewellery store chain. I was responsible for 26 stores across 3 states. I had my own office and staff could knock on my door

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