“Does happiness make people more productive workers?” was the question that Andrew Oswald, Eugenio Proto, and Daniel Sgroi of Warwick University’s Economics Department sought to answer.
Their findings gave an unambiguous yes. Happiness has a large and positive causal effect on productivity. Positive emotions appear to invigorate people, while negative emotions have the opposite effect. They found that happier workers’ effort levels go up, while their “precision” is unaltered (their tests looked to separate the effects of ability from the effects of effort). Happier workers were 12% more productive. What would that do to your organisation’s bottom line?
At the same time, they found that unhappiness stemming from deaths or serious illness of family members reduced productivity to a striking degree. Unhappier workers were 10% less productive.
If happiness in the workplace brings significant increased returns to productivity, then leadership teams and their HR departments will need to consider the implications. A start would be to systematically measure happiness and productivity.