Why Employee Happiness and Productivity Are Connected

Business owners are often obsessed with productivity — and with good reason, too. An apathetic or underproductive staff is going to directly impact their bottom line. The fear of hurting profits or, even worse, losing money often drives employers to push for greater production — regardless of the effect that this may have on their employees.

However, in recent years it’s become abundantly clear that an entrepreneur that invests time and resources into the seemingly contradictory cause of their employee happiness ultimately reaps the reward of greater productivity for their company.

How Happy Employees Lead to Greater Productivity

Job satisfaction is an essential concern for modern employees, and it goes without saying that a satisfied employee is a happy one. While that may sound all well and good for your staff, it actually has some pretty profound effects on your business as a whole as well.

Your employees’ happiness leads to greater engagement as they show an increased interest in the source of their happiness. This interest typically translates to being more present. If a customer needs help, a task is left unfinished, or a deadline is approaching, they’ll be more willing to step up to the plate.

In addition to this organic increase in interest and attention, happy employees are often more loyal, healthy, and willing to take risks as they function from a position of positivity and confidence.

All of this eventually translates into productivity. For instance, it’s been shown that happy employees are 20% more productive — and even 37% more productive when working in sales. A happy company also statistically tends to have better performance and even higher stock prices.

Ways to Increase Happiness in Your Company

Of course, simply being aware of the importance of happiness doesn’t equate to having happy employees. In order to foster happiness in your staff, you must actively strive to let them know that they matter, they have an impact, and they’re progressing towards positive change.

Here are a few suggestions for ways to help foster this sense of genuine happiness in your employees.

Communicate but Don’t Micromanage

There’s nothing like having a boss watching over one’s shoulder to help dampen an employee’s spirits. With that said, a complete lack of engagement between a boss and their employees can be equally harmful.

Instead, look for ways to promote healthy communication with your staff. Encourage them to feel comfortable voicing their problems to you. Then, strive to actively listen to and take into account what they are trying to communicate.

Take Care of Your Employees

At the end of the day, you need to make sure that you’re not just hearing your employees’ concerns, you’re also helping to address them. The number one way that you can do this is by compensating them properly for their time.

Provide good pay — 85% of employees report financial incentives as a top motivator — offer bonus and incentive plans, and equip them with the right equipment to do their jobs well. Properly compensating employees (within reason, of course) is the number one way that you can increase their happiness, your company’s productivity, and your bottom line.

Focus on Community

Community is critical in maintaining a positive company culture. Strive to impress upon your staff that you’re all in this together. While personal professional growth and success are wonderful, they should be achieved within the greater context of you all working towards something collectively.

Even in the remote-work-heavy COVID-19 era, it’s important to develop a community mindset in your organization. Fortunately, there are many ways you can work towards building your team remotely, such as creating a dedicated Slack channel for conversations, conducting virtual “meetups,” or even assembling an amusing org chart of your team’s pets.

Hire With Your Culture in Mind

Once you’ve established a happiness culture in your company, it’s essential that you maintain it. This is never more important than when you hire and onboard a new employee. Before you conduct interviews, take the time to list out what attributes you’re looking for that specifically lend themselves to the company culture that you’ve created.

Check in Regularly

Finally, once you’ve strategized and set your “happiness leads to productivity” campaign in motion, it’s worthwhile to check in on the fruits of your labor regularly. Set up both qualitative and quantitative key performance indicators (KPIs).

The former should reflect your employee’s actual happiness. You can gather this information simply by requesting feedback. The latter should reflect your company’s productivity, which can be statistical and will depend on the resources you have available.

Having KPIs in place can help you gauge the effectiveness of your efforts and adjust them when necessary.

Benefiting from Happiness and (By Extension) Productivity

As a business owner, you have many priorities on your mind. However, it’s in your interest to ensure that your employee’s happiness remains amongst them.

Happy employees lead to loyal, committed, and interested employees. They will have your business’s best interests in mind and will naturally be more productive as they help to build a company that willingly rewards them for their efforts.

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