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Happy employees are critical for an organization’s success, study shows

August 28, 2023

Happiness makes people work harder, according to recent research from the University of Warwick (UK). Economists carried out a number of experiments and found happiness made people around 12% more productive.

The study, led by Professor Andrew Oswald, Dr Eugenio Proto and Dr Daniel Sgroi from the Department of Economics at the University of Warwick, included four different experiments with more than 700 participants.

During the experiments, a number of the participants were either shown a comedy movie clip or treated to free chocolate, drinks and fruit. Others were questioned about recent family tragedies, such as bereavement, to assess whether lower happiness levels were later associated with lower productivity levels.

“Companies like Google have invested more in employee support and employee satisfaction has risen as a result. For Google, it rose by 37%, they know what they are talking about. Under scientifically controlled conditions, making workers happier really pays off,” Professor Oswald said.

According to the authors, this is the first causal evidence using randomized trials and piece-rate working. They then highlighted various emerging implications in the table: 

  1. “Economists and other social scientists may need to pay more attention to emotional well-being as a causal force.” 

  2. Better bridges may be required between currently disparate scholarly disciplines.” 

  3. “If happiness in a workplace carries with it a return in productivity, the paper’s findings may have consequences for firms’ promotion policies, and they may be relevant for managers and human resources specialists.” 

  4. “If well-being boosts people’s performance at work, this raises the possibility, at the microeconomic level and perhaps even the macroeconomic level, of self-sustaining spirals between human productivity and well-being.”

Source: University of Warwick