The idea that happiness matters originated in the mid-18th century when Scottish philosopher Frances Hutcheson described the best society as the one that had “the greatest happiness of the greatest number”. It was also a belief held by many of the French ‘philosophes’ of the 18th century and by Italian reformers like Beccaria, but it took deepest root in the New World where Thomas Jefferson asserted that “the care of human life and happiness… is the only legitimate objective of good government”. Jefferson also drafted the classic phrases in the American Declaration of Independence about life, liberty and the pursuit of happiness.
The experience of happiness is beneficial to workplace success because it promotes workplace productivity, creativity, and cooperation. There are several reasons why this is the case. The experience of positive feelings motivates people to succeed at work and to persist with efforts to attain their goals. Individuals who are happier are more likely to be healthy and will, in turn, tend to be more productive (in part, simply because happier and healthier individuals will take fewer sick days). In addition, individuals who are happier better integrate information leading to new ideas, which leads to creativity and innovation. Finally, individuals who are happier tend to have better social relations. In the context of work this leads to greater cooperation among coworkers and with customers.
Oswald et al. (2012) investigated how positive feelings influence productivity in an experimental setting. In an experiment involving piece-rate pay for research participants across a number of days, the economists found that those who were put in a positive mood had a greater quantity of work output (about 10-12 percent), but no less quality of output. Those performing the task at low and medium levels of productivity were helped most by being put in a good mood. As part of that same research, Oswald et al. (2012) also found that a bad mood induced by family illness or bereavement had a detrimental impact on productivity.
Employees who are high in subjective wellbeing are more likely to achieve more while at work. Peterson et al. (2011) found that happy workers – optimistic and hopeful, resilient and high in self-efficacy – were more likely to be high in supervisor-rated performance and in financial performance. Conversely, whereas positive feelings reduce absenteeism from work, negative feelings increase absenteeism as well as turnover.
Happiness has also been shown to enhance curiosity and creativity. Foremost, positive feelings are associated with curiosity and creativity. Leitzel (2001) found that happy people are more likely to feel energetic and interested in doing things, as well as scoring higher on measures of curiosity. Further, there is a large experimental research literature showing that people put in a good mood tend to be more original, creative, and show greater cognitive flexibility. Both Amabile et al. (2005) and George and Zhou (2007) found that workers are more creative when they experience positive moods. Indeed, two recent meta-analyses of experimental and non-experimental studies showed that although the strength of effects depend on the context and motivational focus, happiness is related to and generates creativity.
On the other hand, negative emotions in the workplace, especially chronic or intense ones, can be very detrimental to the organisation. For example, Felps et al. (2006) found that a single negative individual in a work unit often brings down the morale and functioning of the entire group.
One indicator of the subjective well-being of employees is job satisfaction. A quantitative review found that job satisfaction is a key predictor of job performance, showing that happy employees are better performers in their workplace. To establish a causal relation, a meta-analysis of panel data demonstrated that job satisfaction predicted future performance, but performance did not predict future job satisfaction. Erdogan et al. (2012) reviewed the research showing that individuals with higher life satisfaction are more likely to have higher levels of career satisfaction, lower turnover intentions, and higher organisational commitment.
Subjective wellbeing brings about greater success at the organisational level as well. Bockerman and Ilmakunnas (2012) found that job satisfaction predicts the productivity of manufacturing plants. Harter et al. (2010) found in a longitudinal study of 10 large organisations that worker engagement makes a difference to productivity. Work units in which employees were satisfied and otherwise felt highly engaged with their work led to improvements in the bottom line, measured in terms of revenue, sales, and profit. On the other hand, reverse causality going from company success to employee satisfaction was weaker. An analysis of the “100 Best Companies to Work For in America” revealed that they increased more in equity value compared to the industry benchmarks.
The study by Harter and his colleagues (2010), based on 2,178 work units in 10 large companies, found that engaged and satisfied workers led to greater revenue, sales, and profits. The two factors that mediated the relation between employee engagement and the performance outcomes were customer loyalty and employee retention. It makes intuitive sense that customers would prefer to interact with positive employees and thus frequent the business. Employee retention is a large challenge for modern companies both because it is expensive to replace employees, especially highly skilled ones, and because more senior employees have more experience on the job.
A major reason for the success of happy individuals and organisations is that they experience on average more positive social relationships. Research clearly shows that happy workers are more cooperative and collaborative in negotiations than unhappy ones. In general, positive emotions boost cooperative and collaborative behavior in negotiations rather than withdrawal or competition. Individuals who are in a positive mood are more willing to make concessions during negotiations. Through cooperation, they reach a better joint solution in negotiations. Individuals in a positive mood are more likely to make cooperative choices in a prisoner’s dilemma game as well. People in a positive mood are also more likely to show cohesion with their group. Recent experimental studies have shown that positive emotions lead to trust and cooperation when specific conditions are met. Overall, happiness leads to cooperation and collaboration in the workplace, particularly so in situations involving negotiation.
Excerpt from the World Happiness Report 2013.
All 193 United Nations member states have adopted a resolution calling for happiness to be given greater priority and March 20 has been declared as the International Day of Happiness - a day to inspire action for a happier world.