• Tue, Apr 10 2012

Happy Workers Are More Productive, But They Aren’t Cheap

happy workerYou can’t read through a business journal or peruse a business website without encountering some type of study about happy workers and why it’s so important to have positive and engaged employees. That on-site gym? It pays off in more than healthcare costs, it gives your employees endorphins!

We’ve jumped on the happy bandwagon here at The Grindstone too. I can admit that my jaw dropped when Gallup reported that employee disengagement costs companies $300 billion annually. I thought that we just needed to remind companies, “The fact is that unhappy employees have a harder time doing their job. They are less emotionally attached to their projects, they feel less pride in their accomplishments and they are less inclined to work overtime. Or come to work at all.”

So why aren’t businesses jumping to create the happiest, most engaged work force imaginable? Why aren’t we seeing more companies create Google-inspired campuses with game rooms and impressive cafeterias? Why can’t I nap at work?

Well, happiness isn’t as cut-and-dry as it seems. And amenities don’t always guarantee happiness or a return on their investment. Creating a positive corporate culture takes a lot more than an in-house gym and spa.

In one of my first experiences with a really miserable job, I worked for a manager who seemed completely incapable of expressing an opinion. She was never happy with my work, and yet when I looked for guidance, I got vague and dismissive responses. Even worse, she would chastise me for something and then proceed to do the exact same thing I was in trouble for. I was so frustrated at always being wrong and yet never being told what she considered right that I stopped putting effort into my work. I can fully admit that I was not my most productive.

Creating a positive workforce starts with the people in your company. It means that hiring managers must make a positive attitude part of their interviewing criteria. It means that promotions need to be awarded to managers who inspire, instead of managers who use fear as a motivator. The most effective, and least costly, way to create a happy company is simply to get the right people doing the right job. In this way, some of your companies may be organizing for happiness right now, and you just haven’t realized yet.

But seriously, what about those perks? They worked at Google, Facebook and Apple. Why aren’t we all seeing them?

Well, you’re looking at three companies that found themselves with a huge influx of cash. These companies had massive profits and quick spurts of growth, leaving them financially ripe for the employee amenities picking. They needed places to invest their money. And make no mistake, happy employees can be an investment.

Smaller businesses who aren’t working the same type of budget have more opportunity costs. Their profits could go to an office daycare to help working parents, or they could go to a technology update that’s desperately needed. The funds could bolster a dwindling marketing budget that got slashed during the recession. It could hire a handful of temp workers to get you through your busiest season.

There’s a reason that the biggest companies have the most perks, and it’s not because the perks helped the company succeed in the first place. It’s because only the largest and most prestigious companies can afford that type of investment. They’re the only ones who can give up the opportunity cost of growing their business further.

Costas Markides, of the London Business School, argued in BusinessWeek, “The biggest cost to having happy employees becomes evident when we ask the question: ‘Why are our employees happy?’ One possible reason: We have tried to keep them happy by never saying no to them—an attitude that any parent call tell you all about.” Is it possible that some companies will take this call to happiness and truly spoil their employees? Well, Google does have spa services. I don’t know how productive I am after a hot stone massage.

The truth is that creating happy employees is a lot more complicated than sponsoring social activities or having a really great coffee bar in the kitchen. It’s more than in-house daycare and gyms. And it’s even more than simple positive attitudes. Yes, happy employees are more productive. But where will your money be most productive? That answer might not lead to a bunch of luxury perks.

(Photo: Happy Worker)

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