Why Job Happiness Increases Performance and the Cost of Its Deficit

“I’m not a social worker, so why should I have to care if staff are happy? I only care about the bottom line – are they getting the job done?” said the CEO of a certain lumber company.

“Getting the job done is certainly important,” consented the consultant he spoke to, “but at what cost? How many of your people will put in more than what you want done, especially in times of crisis? How many of your people would take a bullet for you?” the consultant quickly enquired.

“I guess I can see your point, but you’d have to convince me it would increase productivity,” the CEO conceded.

Today most CEOs will quickly respond, “Increasing shareholder value” to the question: “What’s the priority in your company.” A lot of business leaders are so focused on maximising profit that they hardly notice what is going on with the people in their organizations.

Yet placing profit before the people is like a coach placing the need of the firm before the needs of the players. Apparently, no coach can build a great team that way. “But that’s sport and we are talking business here” a business leader may say. Yet unknown to him this approach is costing him the greater profit he could have made possible.

Think about it, the coach does not go into the field, the players do. In the same way, CEOs and managers do not attend to the customers, the employees do.

Most CEOs function as though their primary responsibility is the customer yet in reality this is not true. Most of them have not even spoken to any customer for decades.

Take a bank for instance, how many bank CEOs talk to their customers one-to-one each year. Again, an Academic institution, how many school directors or VCs go into the classroom to teach their students?

Business leaders need to realise that they are simply responsible for the people who are responsible for doing the job.

You jeopardise the result you want to accomplish when you jump the people and go straight to profit. Usually, you can have a short-term profit but the cost of that is much more than you can imagine. You will have more lock up in your employees than you can unlock. You will shut down their creativity and proactivity without knowing it.

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Leaders who do not care about their staff like the CEO I mentioned earlier will naturally, without empathy, respond to drop in performance by replacing the employee. Why? They want result. If you are not performing, then get out of the way let us have someone who will perform.

Unknown to them the reputation of the organisation within and outside is at stake as every decision an organisation makes is a communication to its employees. This is a cost.

So, people in the organisation will come to work each day afraid they might be the next. And fear freezes people’s ability to produce outstanding results.

Then your workplace becomes like an airport where people simply arrive and wait for flight. Because they come to work each day but preparing themselves to go through the exit door any moment – sending résumés and attending job interviews

Now some business leaders, like I heard one say, “soldier go, soldier come business continues.” Of course, if one employee leaves an organization, he/she will be replaced, and business will continue. Yet this way of thinking is very myopic. The cost implications of losing an employee reveals it.

A research done by Society for Human Resource Management (SHRM) shows that every time a business replaces a salary earning employee, it costs 6 to 9 months’ salary on average. For example, an employee who earns #100,000 monthly, that is #600,000 to #900,000.

This cost will include recruiting, interviewing, hiring, orientation and training, lost productivity, onboarding, potential customer dissatisfaction, reduced or lost business, administrative costs, lost expertise etc.

The problem is that most business leaders do not sit down to consider these financial analyses let alone developing a counter measure.

However, on the contrary, great leaders understand that if they take care of their employees, their employees will take care of the work. They increase productivity by meeting the needs of people in their charge not necessarily by overseeing the work itself.

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Consequently, one of the ways they do this is by creating a workplace where their employees are happy and enjoy their work daily.

DOES HAPPINESS TRANSLATE TO PRODUCTIVITY?

The CEO I mentioned earlier, though conceded but wanted to be more persuaded that happiness translates to increased productivity. Does it? Or is it what one of those myths that should be discarded or never accepted?

A study conducted by economic researchers at the University of Warwick discovered that happiness resulted in a 12% increase in productivity. On the other hand, unhappy workers were 10% less productive. According to the research team, happy employees caused significant positive improvements on productivity.

Harvard Psychologist, Teresa M. Amabile Ph.D. with her team studied 26 creative project groups, from 7 different companies selected from three different industries.

This project groups required creativity or innovative solutions to get their work done successfully. 238 professionals participated in the research from the 26 groups.

Each professional was asked to send in daily confidential electronic dairies describing what had gone on for them in their experience and what their inner work life was like each day. Over a period nearly 12, 000 daily dairies were assembled and analyzed.

And they discovered that overall, the more positive a person’s mood on a given day, the more creative thinking he did that day. “Across all study participants, there was a 50 percent increase in the odds of having a creative idea on days when people reported positive moods, compared with days when they reported negative moods” said Teresa.

More so, when people had one positive emotions (e.g. feeling happy) on one day, they were not only more likely to have creative ideas that day, they were also, more likely to have creative ideas the following day and even controlling for that day’s mood – that is, a carry-over effect on positive emotions and creative thinking.

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Tony Hsieh, CEO of Zappos, an online shoe, and clothing retail company which has been built on happiness philosophy said, “You can’t have happy customers unless you have happy employees.” That explains the reason behind the quality work that go on in Zappos whether the employee is at the call center or warehouse.

BUT WHY DOES HAPPINESS INCREASE PRODUCTIVITY

It turns out that our brains are literally hardwired to perform at their best not when they are negative or even neutral, but when they are positive – happy mood.

Psychologists have long known that negative emotions narrow our thoughts and range of actions.

For example, whenever you feel fear, your thoughts and range of actions will be limited to either get rid of whatever it is or get away from the scene.

If you feel anger your thoughts will centre around attacking whatever it is or getting away from the scene. This is the same with feeling disgusting. Only limited options in your response repertoire – fight or flee.

Imagine that the situation in your workplace have deteriorated; salaries are unpaid, management cannot be trusted etc. and people in the organisation have become sad and angry, those two options could play out in different shades for different people.

Some may fight by stonewalling, evading responsibility or absenteeism. While another may flee by resigning and moving on to another organization.

However, positive emotions – happiness – produces what Barbara Frederickson calls “Broadening effect. “The epiphany In her study of positive emotions is that they broaden our perspective or put another way, they expand our possibilities. 

They allow us to discard automatic responses and instead look for creative, flexible, and unpredictable new ways of thinking and acting (Fredickson 2004).

Therefore, every business leader that intends to get optimal performance from his/her employees must necessarily commit himself to creating a workplace where his employees enjoy positive inner-work life. This will in turn translate to increased bottom-line performance for the company, better customer experience and increased shareholder value.

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