How CEOs Can Help Improve Productivity by Keeping Employees Happy

Numerous studies, and perhaps even common sense, have long told us that happy workers are more productive workers. While companies often take measures to try to raise employee satisfaction, more than a quarter of the entire workforce is unsatisfied with their current job, according to the 2016 Industry & Productivity Report by Bolste.

Some experts say employee happiness needs to start at the top with a CEO dedicated to keeping morale high. A 2015 study by economists at the University of Warwick conducted four different experiments with 700 participants and found that people who were “happy” tended to be 12% more productive.

As leaders, the researchers pointed to companies such as Google, which has raised worker satisfaction by investing in employee support. “The driving force seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality,” said researcher Dr. Daniel Sgroi.

How to promote employee ‘happiness’
Happiness comes not just from financial incentives, but from culture. Starbucks recently announced a 5% raise for its employees, but has also been hailed as a progressive employer leading the way on social issues. Andrew Challenger, vice president of the outplacement firm Challenger Gray and Christmas, told the Chicago Tribune that it “makes sense” for companies to make these moves given the sluggish wage growth. Challenger said that as labor markets tighten, companies need new ways to hold on to good employees. While a blanket voluntary raise will increase paychecks, it could also have a strong impact on happiness and morale. “It’s smart for a company like Starbucks to get ahead of the curve and get great PR,” Challenger said. “[If] you don’t do it begrudgingly, it helps employee loyalty.”*

Virgin Atlantic founder Richard Branson has often publicly outspoken about employee happiness. He said in a company post that while there is no “one-size-fits-all” solution, the basis of Virgin’s initiatives is to treat people with respect and give them more responsibility. Branson recommends that leaders experiment and listen to their staff. Virgin now offers employees at its head offices unlimited annual leave and flexible work schedules. “If your people are not happy and healthy, then your enterprise’s prognosis isn’t good, ” said Branson.

Caroline Webb, author of “How to Have a Good Day,” told Knowledge@Wharton that leaders need to get people into “discovery mode,” where they’re focused more on the rewards than the threats in a situation. “If you can get the brain to do this], then you’ll get to clearer thinking,” said Webb. She said leaders need to better articulate their goals, focus less on negative language such as “don’t” and more on positive words, actions and outcomes. “If you are focusing on the negative language, then it seems to trigger more of a defensive response…it’s going to affect what we perceive,” said Webb.

Alexander Kjerulf, founder and Chief Happiness Officer of Woohoo Inc., told Huffington Post that “happiness starts at the top” and there are a number of simple things CEOs can do to create a happy workplace. Kjerulf recommends things like regular lunches with employees, encouraging critical questions, celebrating accomplishments, random acts of workplace kindness. He said one of the easiest and most effective ways to increase employee happiness is to simply take a few minutes per day to “walk the halls” and meet employees. “I love this because it shows a genuine interest in the employees and because [they] are happy [themselves] and not afraid to show it,” said Kjerulf.