Employee Happiness Is A Leading Indicator Of Profitability And Productivity

Over the past year, I have been researching and writing a number of Forbes #HappinessMatters articles discussing the declining happiness of employees and the impact this is having on businesses (see references below).

What is clear is that buying things does not advance happiness, social media and technology advances depression and mental illness (especially with young people and girls), and that despite all the health and wellness benefits, flex work, we currently have the Great Resignation is accelerating. Significant root causals are: poor people management leadership skills, lack of relationship(s) depth (community strength/social ties), and fear based cultures impacting positive growth narratives.

A Few Happiness Studies

Carl Cederström in his book, The Happiness Fantasy, writes that corporations and advertisers have promised satisfaction, but have led people instead into a rat race of joyless production and consumption. Collecting material comforts of life research shows don’t give life meaning.

Increasing evidence shows that media and technology use predict psychological and physiological outcomes, especially among young people. Psychologist, Jean M. Twenge has shown, that social media increases depression, especially among girls and young women increases. We also have a generation of lost boys, living in their gaming worlds, and are more comfortable staying immersed in their man caves than having a social conversation or turn violent due to their fantasy worlds they have been immersed in for years. Parental supervision is critical as we look ahead at the next workforce replacing the baby boomers.

The famous Harvard study also found that followed hundreds of men who graduated from from 1939 to 1944 throughout their lives, into their 90s. The researchers wanted to know who flourished, who didn’t, and the decisions they had made that contributed to that well-being. The lead scholar, Harvard psychiatrist George Vaillant, summarized the results in his book Triumphs of Experience. His major finding was: “Happiness is love. Full stop.”

My company starts every day with a Hug Huddle where we use an agile scrum sharing what we are doing for the day, and celebrate accomplishments daily, when appropriate. Its amazing to see everyone’s eyes light up on our Zoom calls – as they see they are deeply valued and respected. We are not afraid to say words like love, grateful, courage, and applaud performance in the moment. When I was an GM at Xerox I discovered and learned the power of positive language like: Let me build on that idea, never shut out your team mate voices – everyones ideas have merit, etc. We used to count our positive comments in meetings and these feedback loops are incredible informing on % of information sharing comments or % of information (dialogue and collaboration) comments — all signals of building relationship strength. Life is short and energy is needed even more with more of us working in flex work environments.

In other words, close relationships, more than money or fame, are what keep people happy throughout their lives, the study revealed. Those ties protect people from life’s discontents, help to delay mental and physical decline, and are better predictors of long and happy lives than social class, IQ, or even genes. That finding proved true across the board among both the Harvard men and the inner-city participants.

What Is The Impact To Business?

We have already established in this article series is Happiness is Big Business. Gallup has been asking Americans how they are feeling about aspects of life for the last two decades. And this year, across those 29 different measurements, just 38% of Americans say they’re satisfied. In 2020, before the pandemic began, an average of 48% of Americans said they were satisfied. There was a big drop in 2021, when 41% indicated they were happy with what was going on these 29 different metrics.

According to a study by the Queen’s School of Business and Gallup, disengaged workers logged 37 per cent higher absenteeism, 49 per cent more accidents and 60 per cent more errors and defects than engaged employees. According to the Canada Human Resources Centre, unhappy workers cost the North American business economy over $350 billion per year in lost productivity. Another finding by Gallup is that 82 per cent of managers are miscast in their roles, which is likely one of the key factors for disengagement.

HRDCanada magazine recently reported that despite seven out of 10 employees in North America feel disengaged at work, and just under 35 per cent of employees are planning to switch jobs. This means that only half of disengaged employees are willing to actually do something about it and make a change.

The other half, likely for a host of reasons, prefers to stay put and put up with managers or jobs they don’t like.

The cost of disengagement to companies is definitely staggering.

How Can We Start To Change The Tide?

First, it starts with organizations building a corporate culture that respects genuinely its talent, and practices role model diversity and inclusiveness. It is critical to build trusting relationships in the office environment, and educate employees on building a happiness culture, and provide support systems to support home and family relationships with counselling services. An employee who is lonely and miserable in a relationship in their personal home life cannot wake up in the morning and bring a genuine happy face to work. Emotions cannot be easily separated from AM to PM modalities. Humans simply are not robots. Emotions run deep.

In addition, a great deal of the research on the happiness gap, squarely places the day to day happiness mood environment is set by the employee’s manager and the health of the relationships of the community an employee is immersed in. For centuries, we have learned the importance of community and its impact on our emotional well being.

So bringing the entire person to work in a healthy state of mindfulness has to equip employees and managers with new toolkits: goal setting, health and wellness trackers, moodinsights, etc.

Goal Setting

LuluLemon, a fitness and life-style global retailer, has a culture that focuses on bringing the whole person to work and focuses on goal setting strategically, not just for work, but for life. They place a great deal of emphasis on setting audacious goals. They have a unique Purpose, Vision + Goals program and tools that will enable employees to declare what’s truly important to them—and set out to make it happen. In other words, they emphasize employee unique purpose in life and only when this is clear, can one be truly happy.

Google takes Objectives and Key Results (OKRs) as a practice not an annual event, Google asks its employees to set objectives, with management acting as a coach and a guide. Google reinforces the expectation that goals are roughly 70% achievable, ensuring stretch goals will require extra effort. Second, everyone is encouraged to set one goal that is purely personally of interest so Google recognized the importance of goal setting from both an inside and outside perspective.

Adobe is another corporate culture that demonstrates its care for its employees, and continues to be a top performer in employee happiness and is one of the top 100 companies to work for.

Carol Dweck, a professor at Stanford explains in Mindset, that it is not just our abilities and talent that bring us success, but whether we approach our goals with a ‘fixed’ or ‘growth’ mindset.

Health and Wellness Applications

B2C solutions are plentiful in the Health and Wellness market, a market that is exploding in growth currently.We estimate the global wellness market at more than $1.5 trillion, with annual growth of 5 to 10 percent. A rise in both consumer interest and purchasing power presents tremendous opportunities for companies, particularly as spending on personal wellness rebounds after stagnating or even declining during the COVID-19 crisis.

One of the segments gaining tremendous momentum is mindfulness apps which have consistently gained mainstream consumer acceptance with meditation apps like Calm, Headspace, Soothe or Travaasa. During COVID-19 , reports of mental distress have increased globally; and research shows consumers want their employers to provide access to mindfulness apps at work. Companies like Apple, Google, and Nike have also promoted mindfulness meditation as a staple for employee development.

Purolator is a leading integrated freight, package and logistics solutions provider in Canada. has health first as its number one corporate priority, and offers mindfulness training to its employees. The company is using MoodInsights, an innovation supported by the Ontario Center of Excellence and The Ministry of Transportation in the AVIN innovation program for its drivers and unit managers. Purolator also earned fifth place on the Forbes list of Canada’s Best Employers of out of 300 large scale organizations and was the only Logistics and Transportation company to rank in the top 50. This is the fourth consecutive year Purolator has placed on Forbes’ list — moving up from 19^th spot in 2021.

Conclusion

Based on the research I have been doing, there are three key messages for Board Directors and C-level executives that I want to share:

1.) Culture Trumps Always – The tone starts from the top. So dig deep into your cultural rituals and norms and take a hard look at reality vs what you would like to hear. Bring in experts externally to provide an audit of culture health and employee happiness. Understand annual reviews are not enough or end of year employee satisfaction surveys. They are too slow – our world is moving far too fast to wait 12 months for feedback on happiness. This should be a daily ritual.

2.) Build Management – People Centric Talent – The research reinforces if you don’t have good management that employees trust and are encouraged to speak up on what’s working and not working and valuing employee curiosity and courage, you are likely having the wrong narrative. Building healthy happy teams cannot be fear based as John Hagel, futurist, so aptly stated in his new book, The Journey Beyond Fear, is an excellent read. Having spoken with John a month ago, I was fascinated with his own personal story which reinforces management must be vulnerable and not afraid to share their own challenges in life. People want to know they are working with real people and emotional feelings and sharing vulnerabilities and constructing positive narratives will all help us course correct the great resignation underway. Fostering positive open cultures that support curiosity is a fundamental building block. Dr. Diane Hamilton’s research in curiosity is ground breaking, and essential for innovation and growth capacity. If you don’t know her research on the curiosity code, recommend you learn about it.

3.) Evolve your management practices and toolkits to support creating a collaborative, communicative, productive and mindful organization where health and wellness is woven into your employee daily practices. Start each day simply asking: Are you happy or How are you feeling? Have a genuine conversation and listen. There are powerful toolkits you can tap into but they are useless unless management at the top are role model and use them too. I see far too many companies investing in toolkits but leaders are not slowing down to increase their own digital literacy and hence adoption of new practices are marginalized.

In closing, as a board director or CEO, you have a responsibility to ensure profitable growth and fiscal responsibility for ethical practices. From my perspective, integrating ESG frameworks must evolve to include Happiness and Mindfulness. This is on the horizon and in the works and in time smart industry analysts will ask CEOs about their happiness index.

WorldBank, statistician Nic Marks is helping to shift measurement thinking and asks why we measure a nation’s success by its productivity — instead of by the happiness and well-being of its people. He has introduced the Happy Planet Index, which tracks national well-being against resource use.

So what are you going to do to reflect on your company’s happiness positioning?

More of Dr. Cindy Gordon’s #HappinessMatters Research Articles

The Great Resignation: The Unhappiness Age Must Shift to the Happiness Age

Pandemic Preparedness: 9 AI Strategies For Companies To Plan For With A Focus On Advancing Caring And Wellness Intelligence

Customer Intelligence Growth Only Accelerates with Happiness Intelligence Foundation

The New AI Supply Chain: Happiness Ecosystems

REFERENCES

Harvard Study – The Secret to Happiness

Harvard Study — Relationship are Key to Happiness