creating a culture of happiness

Happiness:The Link Between Happy Employees and a Thriving Organization

Creating a Culture of

Business in the new millennium requires a different framework for success than what may have worked in the past. Today, top-performing organizations are also the best places to work. Instead of being plagued with bad morale, low productivity, and even strikes, thriving organizations are full of happy employees who readily defend the employer and tend to consider their coworkers — including management — as family.

Recent research confirms that a culture of happiness, by generating numerous benefits, contributes greatly to the prosperity of an organization.

The good news is that employee happiness can be enhanced through targeted wellness programs. Research shows such improvements can have a significant positive impact on nearly all aspects of business — even lowering healthcare costs. Based on the recent literature, this white paper explores how a culture of happiness can contribute to the success of your organization.

Does It Matter If Your Employees Are Happy?Multiple studies have documented that a culture of happiness matters, and we see proof in the success of companies such as Zappos and Google.3, 4 Top organizations are recognizing that happiness among employees predicts beneficial behavior, even beyond a person’s job description. Compared to their less happy counterparts, happy employees:

• Are more willing to help out coworkers and customers5, 6

• Describe their jobs in a more positive light6-13

• Perform better on more objective, work-related tasks2

• Tackle a wider range of job tasks14

• Defend their organizations from attack15

• Receive better ratings from supervisors and peers16

• Enjoy higher income levels17

• Get more social support from both colleagues and supervisors18

• Cope better with organizational change11

• Exhibit a greater degree of cooperation6

• Make decisions more efficiently19

• Experience less conflict working in teams20

• Feel more commitment to their organization11-13, 21

• Report greater job satisfaction.6-13

The Link Between Happy Employees and a Thriving Organization

Creating a Culture of Happiness:

Happiness Defined — Someone Who Experiences …• Frequentpositiveemotionssuchasjoy,satisfaction,

contentment,enthusiasm,andinterest1

• Slightlytomoderatelyintensepositiveemotionsmostofthetime.2

Other Traits of Happy People:• Pursuenewgoals22

• Havesuperiorinterpersonalskills2

• Areconsideredmorepopularandlikablethanunhappypeople19,23

• Seemmorelikelytoenternovelsituations22

• Interactmorefrequentlywithotherpeople22

• Performactsofaltruism,courtesy,andconscientiousnessmoreoften6

• Createsuccessbecausetheyarehappy(asopposedtobeinghappybecauseofsuccess)1

• Acquiregreaterwealthovertheirlifetimes17

• Givemoretocharityandaremorelikelytodonateblood1

• Livelongerandwithahigherqualityoflife1

• Arechosenaspreferablecompany,evenbyunhappypeople.23

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CreatingaCultureofHappiness|2

Happy Employees Can Help an Organization ThriveSuccess for an individual can be predicted now, and in the future, simply by measuring a person’s happiness level...

• Even before obtaining a job, happier candidates were more likely to land a second interview1

• Job satisfaction and financial success for 26-year-olds were predicted by examining their degree of happiness at age 181

• Employees found to have positive emotions and then rechecked 5 years later were still receiving superior ratings compared to their unhappy peers1

• A study of insurance agents with a “positive disposition” found that they sold more policies than their less positive counterparts.3

• Physicians in a positive mood were able to solve problems more creatively than neutral controls.24

Strong evidence for individuals. But what happens when an organization centers its culture on happiness?

SAS, a technology company specializing in statistics, and #1 on Fortune’s 2010 best places to work list, offers such a broad array of perks and happiness enticements that Google, #4 on the list, used them as a model when they updated their own happiness culture. SAS has made the list consistently for the past 13 years, but online retailer Zappos, #15 — recently purchased by Amazon for $1.2 billion — is barely 10 years old; they purposely created a happiness culture and saw success accelerate to dramatic levels (see box

at right).3, 4, 25

Example of a Happiness CultureInhisrecentbest-seller,Delivering Happiness,ZapposfounderTonyHsiehrevealsthatin2007hebegantostudyhappinessinthescientificliterature.Herealizedthatmuchofhissuccesswasbecausehisleadershipphilosophyalreadyembracedacultureofhappiness,andheexpandedthisfocustoincludeemployees,customers,andevenvendors.Theresult:Zappossoaredpastallexpectations.3

The High Cost of UnhappinessBased on a Spring 2001 Gallup Management Journal survey:26 •Lowerproductivityduetoactivelydisengaged(unhappy)workerscostsbusinessesaround$300billioneveryyear

•The24.7million(19%)unhappyworkersmiss86.5millionmoreworkdaysandtake13.6millionmoresickdayseachyear•74%ofUSworkersreportfeelingdetachedfromwork

•Eachunhappyworkercostsacompanyaround$13,000/year.

In 2003 JAMA reported that depressed employees: 27

•Representnearly10%oftheworkforce•Lose5.6hours/weekinproductivity

•Cost$44billion/yearinlostproductivitytime.

If these companies were simply great places to work, the list would have less value; but most are also experiencing job growth and doing well financially, despite the tough economy.25

Many organizations on this list hire new employees based on how well they fit into the culture. And most — including Google, with a high-level staff position titled “happiness czar” — constantly look to improve the work environment and support the happiness culture.3, 4, 25

If you take a tour of Zappos, it’s not uncommon to find employees dressed up as pirates, singing karaoke, bowling in a makeshift alley, or even taking a nap.3 At Google, employees can play Foosball, videogames, pool, ping pong, and even roller hockey (twice a week in the parking lot). Google also allows dogs at work and provides 3 free meals/day.4 New and innovative companies are reinventing corporate culture, and finding that when people have fun, productivity soars.

Contrary to a common misperception that employees become happy because of success, research shows the opposite to be true: employees become successful because they first had a happy disposition.1 When a business creates a happiness culture, it gains the many benefits enjoyed by organizations already blessed with a large pool of happy employees.

Researchers break down happiness into 3 main parts to define its primary influences and understand the origin:

Set Point — Approximately 50% of happiness seems to be somewhat genetic; a person has a happiness set point similar to that described for a person’s weight. In other words, just as people tend to maintain a certain weight and return to it after a failed diet, a person returns to a certain level of happiness, despite brief experiences of intense happiness or tragedy.

Circumstances — Surprisingly, and partly because of the set point just described, only 10% of a person’s happiness is determined by their present circumstances (as long as basic needs are being met).

Intentional Activities — The other 40% is your opportunity to make a difference: intentional activities can increase happiness.

IncreasingHappiness

Managers commonly believe that money is the primary motivator for employee happiness, but research shows that intangibles — such as manager-employee relationships, employee control of career path, or work-family balance — are more important.3,28 And employees have some degree of control over these factors. For example, they could choose to spend more time at work at the expense of family in order to improve their manager relationship and enhance their career. But when an organization’s culture expects employees to make choices that don’t support a balanced work-family life, unhappiness is certain.28

Cultures that promote control over these intangibles instead will have a greater chance of success, for example:

• Providing flexible work hours can help employees maximize family time

• Defining a skill-based promotion path gives employees greater control over their career advancement

• Monitoring the employee-manager relationship can provide feedback to improve the work environment.

When added to the evidence already presented, these findings create a compelling case for building a culture of happiness. Your organization’s happiness level does not have to remain static — concrete steps can be implemented to

increase collective happiness.

The 14 Fundamentals29

The14fundamentalswerediscoveredbystudyingthehabitsofhappypeople. Inafollow-upstudy,researchersdemonstratedthatanyonewhointentionally practicedthesefundamentalscouldincreasehappiness:•Becomemoreactive •Developpositive,optimisticthinking•Spendmoretimesocializing •Valuehappiness•Strengthenclosestrelationships •Becomeinvolvedinmeaningfulwork•Developanoutgoingsocialpersonality •Getbetterorganized•Beabetterfriend •Becomemoreorientedinthepresent•Workonahealthypersonality •Reducenegativefeelings•Lowerexpectationsandaspirations •Stopworrying.

Set Point 50%

Circumstances 10%

Intentional Activities 40%

Primary Factors Influencing Happiness

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How to Increase Organizational Happiness: APracticalGuide

In the classic Charles Dickens tale, A Christmas Carol, Ebenezer Scrooge was able to increase the happiness of his employee, Bob Cratchit, simply by giving him an extra lump of coal for the fire and a little time off from work. The point is this: Increasing happiness doesn’t have to mean radical or expensive initiatives; small changes can make a big difference if fully supported by management and perceived as genuine. Consider these ideas:

• Ask employees for candid answers to questions like these:

– Are you happy? Why or why not?

– What changes would you make to the work environment to increase happiness, if cost were not a factor?

– What changes can be made right now to create a happier environment, and still allow our goals to be met?

• Encourage managers to evaluate their current situation:

– Are the employees who report to me happy?

– What makes them unhappy?

– Is it possible to implement one or more of the 14 fundamentals of happiness (see page 3) today?

– If an employee’s concentration begins to drift, can they take a break? Do they have some brief activity available to restore alertness?

– Can anything be done to help employees enjoy their work more?

• Appoint a happiness manager (this could be a full-time position or an additional job duty)

• Invite wellness managers or vendors — in person or through webinars — to suggest topics directly related to happiness and health, then have employees vote on which topics they would like presented

• Keep in mind that a sense of control contributes to happiness; work that into decisions where practical, especially regarding career advancement or the work environment

• Create opportunities for employees to socialize (at Zappos, for example, they made every door an emergency exit except the one through the lobby; with everyone coming and going through the same door, employees were more likely to bump into each other3)

• Implement wellness programs centered on activities (especially exercise), socialization, and proper nutrition; encourage employer-sanctioned after-work clubs, groups, or team sports (keep participation voluntary, though, to avoid defeating the purpose)

• Don’t forget to include the employee’s family where appropriate

• Communicate — clearly and often — the organization’s intent and rationale behind these changes.

In the Words of Researchers: Link Between Exercise and Happiness

“Physical activity may be a tool for mood repair.” 30

“It is clear that physical activity contributes to cognitive functioning.” 31

“Physical activity seems to boost one’s happiness level and is a strong protector against morbidity.” 32

“A change from sedentary to more physical activity was associated with lower stress and higher satisfaction.” 33

“Faithfully engaging in a new exercise program positively boosts people’s mood and vitality and can even maintain the boosts for as long as 6 months.” 34


The Impact of Exercise and Social Interaction on Happiness

Although depression is a serious and costly medical condition, a simple walking program has been shown to significantly reduce the symptoms. Because expenditures for wellness, especially walking programs, usually pale in comparison to medical costs, the current literature suggests that employers could reduce healthcare dollars spent on depression with these efforts.35, 36 Results similar to the walking program were also found for running, weight lifting, and cycling.35-39

The International Society of Sports Psychology (ISSP) concludes that physical activity is related to reductions in anxiety, mild to moderate depression, neuroticism, and stress. All ages and both genders realize an emotional benefit: people become happier with exercise.40 And physical activity may be as effective as alternative treatments for depression, including prescription drugs.41-48

Among the 14 fundamentals found to increase happiness (see page 3), at least 5 have to do with socialization or relationships.29 A corporate culture of happiness should embrace opportunities for employees to interact in positive, productive ways, even if only during breaks or while engaging in wellness activities. On the contrary, if a culture discourages employee interaction or offers no avenues for positive social experiences, achieving the benefits of happiness will be difficult.

Although self-motivated individuals can improve their own happiness, an employer-sponsored wellness program, amplified through social networks (for example, employees teaming up to compete in a walking program), can have a much greater impact.

What’s the Next Step?Cultivating happiness should be recognized as a serious organization objective. You can save time and money by laying the groundwork with a solid plan and executing it with internal and commercially available resources — there’s no need to re-invent the wheel:

1. Gather data for insight on the current level of employee happiness to serve as a baseline for evaluating program effectiveness.

2. Convene a team of stakeholders to identify strategies to build your culture of happiness.

3. Seek management support with a proposal outlining the strategies, documenting research on the impact of employee happiness, and projecting return on investment.

4. Select wellness campaigns with these features:

• Engaging, fun content addressing physical activity, social support, and nutrition

• Interactive tracking tools with immediate feedback

• Participant recognition for achieving milestones and program completion

• Evidence-based content designed to promote sustainable behavior change

• Built-in team competitions and networking opportunities

• Options for individual participation and department or division competition

• Ease in launching, monitoring, and maintaining

• Coordinator guide with simple instructions for smooth implementation and promotion

• Customizing options for co-branding and integration with a rewards program.

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ConclusionsThe research is clear — creating a culture of happiness can have a profound impact on an organization including:

• Greater employee productivity

• Higher job satisfaction rates

• Increased retention rates

• Lower healthcare expenses

With management support, a culture of happiness can be fostered through comprehensive wellness strategies that emphasize physical activity and social support.

• Better cooperation

• Less absenteeism

• Improved response to change

• More commitment.

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3 Hsieh,Tony.DeliveringHappiness:APathtoProfits,Passion,andPurpose2010.

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