Why happiness at work really matters

Are you happy at work? Are the people you work with happy? Should you even care as long as the job is getting done?

It turns out you should – happy companies are more successful on a range of metrics – but creating a happy work environment is counterintuitive. Research and practice both show that what makes people happy in the workplace is not obvious, and relatively easy to provide things like good pay, free food or perks, are over-rated.

The benefits of happiness at work

Researchers from the University of Warwick in the UK found that people who are happy at work are about 12% more productive. Shawn Anchor, author of The Happiness Advantage, has quantified the benefits of a happy company – sales increase by 37%, productivity 31%, and accuracy on tasks improves by 19%, not to mention the health and quality of life improvements for staff.

You might think providing perks such as free food, massages in the office, on-site medical services and gym facilities, would ensure a happy workforce. Google has led the way in perks for some time, even ensuring its building designs are fun (like the slide at its Zurich office pictured above).

But the equation is not that simple – it’s not just a case of perks in, happiness out. While such benefits are helpful in attracting people to work at your firm, they are not that effective at improving company performance. No wonder Google is keen to stress that it’s passion not perks that are the biggest contributor to its success.

Part of the problem is that humans are incredibly good at adapting and we get used to almost anything – good or bad. The classic study on this was done by Philip Brickman, Dan Coates and Ronnie Janoff-Bulman at the University of Massachusetts in 1979. Comparing lottery winners to accident survivors who were paraplegics and quadriplegics they found no significant different in general happiness. People who had won big on the lottery were happy about their good fortune but in fact took less pleasure from everyday activities than the accident survivors.

Salary is not the key to happiness either. It actually comes in to play as a factor of unhappiness – we will be unhappy if we think others in our company or industry are being paid more to do the same task.

A Princeton study found that people who are highly paid are relatively satisfied but are barely happier day to day, tend to be more tense and do not spend their time doing more enjoyable things, than lower paid people.

Alexander Kjerulf, a Danish management consultant (above) who styles himself the Chief Happiness Officer and has advised Ikea, Lego, Oracle, Tata, and Pfizer amongst others, says that results and relationships are actually the most important factors for ensuring people are happy at work. Gallup research backs him up – perks are less important than engagement, which occurs when staff feel they are contributing to something significant.

Tech investor Craig Shapiro tweeted his “org chart for happiness”. On the work side he highlights “fulfillment”, which is in turn a function of productivity, recognition and giving. In other words doing worthwhile work that others appreciate, while also giving back to others, is Shapiro’s recommendation for happiness.

Zappos CEP Tony Hsieh literally wrote the book on happiness in tech. In Delivering Happiness he describes how he built the corporate culture at Zappos by valuing happiness. While Zappos operates some quirky policies eg new hires are offered $2,000 if they decide to quit after the first week, Hseih’s book also highlights the importance of things such as helping staff grow (both personally and professionally), ensuring customer service is everyone’s responsibility and building strong relationships with your team.

Taking inspiration from firms like Zappos, Moo.com, Valve, Buffer and Mailchimp, there’s even now Happy Startup School, which aims to educate entrepreneurs in how to create happy, sustainable and profitable businesses.

Kjerulf, the Chief Happiness Officer, says that while values are important “happiness at work is something you do”. Here’s five tips he offers to foster it at your company:

1. Random acts of workplace happiness. When was the last time you brought a co-worker a cup of coffee unprompted or without warning? Scientific research shows that the random element of these acts really matters. The pleasure/reward centre of the brain is less active when we know something good eg a monthly bonus, is coming, but can be stimulated up to three times as much when the act is unexpected.

2. Hire happy people. The sandwich chain Pret A Manger says you can’t hire someone who can make a sandwich and teach them to be happy, but you can teach happy people to make a sandwich. Kjerulf also cites Southwest Airlines as a company that hires for attitude and trains for skill.

3. Stop negative behaviour. Gossip, rudeness and other negative behaviours act like a cancer at the heart of the company if they are unchecked, says Kjerulf. This is because negative emotions are three times more contagious than positive ones.

4. Celebrate success. Kjerulf consulted with Lego, which a decade ago had been brought to the brink of bankruptcy thanks to a relentless pursuit of innovation coupled with a lack of financial controls. New CEO Jorgen Vig Knudstorp announced the company’s first profit in several years at a company wide meeting but the news was greeted by silence. Lego had no culture of celebrating success and so people simply didn’t know how to react. Now item 0 on every meeting agenda is celebrating something one of the participants has achieved recently, a simple tactic which has helped transform meetings and make them more productive.

5. Celebrate mistakes. If you do then people will be more open to admitting they have made a mistake. Ben & Jerry’s has a flavor graveyard in Vermont where headstones are erected to its retired flavours including short lived flops like Oh Pear and Cool Britannia. NixonMcInnes, a British social media consultancy, in addition to measuring and tracking staff happiness every day, has a monthly event called Church of Fail, where staff are encouraged to share their failures. The company wants to make it ok to fail, because the more it fails, the more it can innovate and succeed.

Making your staff happy is not about expensive benefits, it’s about offering them meaningful work. What company can’t afford to do that?


For a sense of how Intercom tries to engage and inspire staff, read this post from one of our recent hires.