The Link Between Happy Employees
and a Thriving Organization
Creating a Culture ofCreating a Culture ...
Business in the new millennium requires a different
framework for success than what may have worked in the
past. Today, to...
Creating a Culture of Happiness  |  2
Happy Employees Can Help
an Organization Thrive
Success for an individual can be pre...
Contrary to a common misperception that employees
become happy because of success, research shows the
opposite to be true:...
How to Increase Organizational Happiness: A Practical Guide
In the classic Charles Dickens tale, A Christmas Carol,
The Impact of Exercise and
Social Interaction on Happiness
Although depression is a serious and costly medical
condition, ...
Boehm JK, Lyubomirsky S. Does Happiness Promote Career Success? Journal of
Career Assessment 2008; ...
Health Enhancement Systems
712 Cambridge Street
Midland MI 48642
For more wh...
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Creating a Culture of Happiness


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The Link Between Happy Employees and a Thriving Organization
- 14 fundamentals of happiness
- How happy employees help an organization thrive
- How to increase organizational happiness.

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Creating a Culture of Happiness

  1. 1. Happiness:Happiness: The Link Between Happy Employees and a Thriving Organization Creating a Culture ofCreating a Culture of
  2. 2. 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 … • Frequent positive emotions such as joy, satisfaction, contentment, enthusiasm, and interest1 • Slightly to moderately intense positive emotions most of the time.2 Other Traits of Happy People: • Pursue new goals22 • Have superior interpersonal skills2 • Are considered more popular and likable than unhappy people19, 23 • Seem more likely to enter novel situations22 • Interact more frequently with other people22 • Perform acts of altruism, courtesy, and conscientiousness more often6 • Create success because they are happy (as opposed to being happy because of success)1 • Acquire greater wealth over their lifetimes17 • Give more to charity and are more likely to donate blood1 • Live longer and with a higher quality of life1 • Are chosen as preferable company, even by unhappy people.23 1
  3. 3. Creating a Culture of Happiness | 2 Happy Employees Can Help an Organization Thrive Success 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 Culture In his recent best-seller, Delivering Happiness, Zappos founder Tony Hsieh reveals that in 2007 he began to study happiness in the scientific literature. He realized that much of his success was because his leadership philosophy already embraced a culture of happiness, and he expanded this focus to include employees, customers, and even vendors. The result: Zappos soared past all expectations.3 The High Cost of Unhappiness Based on a Spring 2001 Gallup Management Journal survey:26 • Lower productivity due to actively disengaged (unhappy) workers costs businesses around $300 billion every year • The 24.7 million (19%) unhappy workers miss 86.5 million more workdays and take 13.6 million more sick days each year • 74% of US workers report feeling detached from work • Each unhappy worker costs a company around $13,000/year. In 2003 JAMA reported that depressed employees: 27 • Represent nearly 10% of the workforce • Lose 5.6 hours/week in productivity • Cost $44 billion/year in lost productivity time. 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.
  4. 4. 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. Increasing Happiness 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 The 14 fundamentals were discovered by studying the habits of happy people. In a follow-up study, researchers demonstrated that anyone who intentionally practiced these fundamentals could increase happiness: • Become more active • Develop positive, optimistic thinking • Spend more time socializing • Value happiness • Strengthen closest relationships • Become involved in meaningful work • Develop an outgoing social personality • Get better organized • Be a better friend • Become more oriented in the present • Work on a healthy personality • Reduce negative feelings • Lower expectations and aspirations • Stop worrying. Set Point 50% Circumstances 10% Intentional Activities 40% Primary Factors Influencing Happiness 3
  5. 5. How to Increase Organizational Happiness: A Practical Guide 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 Creating a Culture of Happiness | 4
  6. 6. 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. 5 Conclusions The 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.
  7. 7. Endnotes/References 1 Boehm JK, Lyubomirsky S. Does Happiness Promote Career Success? Journal of Career Assessment 2008; 16; 101. 2 Staw BM & Barsade SG. Affect and Managerial Performance: A Test of the Sadder-but- Wiser vs. Happier-and-Smarter Hypothesis. Administrative Science Quarterly 1993; 38, 304-331. 3 Hsieh, Tony. Delivering Happiness: A Path to Profits, Passion, and Purpose 2010. 4 Strickland J. How The Googleplex Works. HowStuffWorks.com www.computer. howstuffworks.com/googleplex.htm 2010/7/30. 5 George JM. State or Trait: Effects of Positive Mood on Prosocial Behaviors at Work. Journal of Applied Psychology 1991; 76, 299-307. 6 Borman WC, Penner LA, Allen TD, & Motowidlo SJ. Personality Predictors of Citizenship Performance. International Journal of Selection and Assessment 2001; 9, 52-69. 7 Connolly JJ & Viswesvaran C. The Role of Affectivity in Job Satisfaction: A Meta- Analysis. Personality and Individual Differences, 2000; 29, 265-281. 8 George JM. Leader Positive Mood and Group Performance: The Case of Customer Service. Journal of Applied Psychology 1995; 25, 778-795. 9 Fisher CD. Antecedents and Consequences of Real-Time Affective Reactions at Work. Motivation and Emotion 2002; 26, 3-30. 10 Judge TA, & Ilies R. Affect and Job Satisfaction: A Study of Their Relationship at Work and Home. Journal of Applied Psychology 2004; 4, 661-673. 11 Judge TA, Thoresen CJ, Pucik V & Welbourne TM. Managerial Coping With Organizational Change: A Dispositional Perspective. Journal of Applied Psychology 1999; 84, 107-122. 12 Mignonac K & Herrbach O. Linking Work Events, Affective States, and Attitudes: An Empirical Study of Managers’ Emotions. Journal of Business and Psychology 2004; 19, 221-240. 13 Thoresen CJ, Kaplan SA, Barsky AP, Warren CR, & de Chermont K. The Affective Underpinnings or Job Perceptions and Attitudes: A Meta-Analytic Review and Integration. Psychological Bulletin 2003; 129, 914-945. 14 Staw BM, Sutton RI, & Pelled LH. Employee Positive Emotion and Favorable Outcomes at the Workplace. Organization Science 1994; 5, 51-71. 15 George JM & Brief AP. Feeling Good — Doing Good: A Conceptual Analysis of the Mood at Work-Organizational Spontaneity Relationship. Psychological Bulletin 1992; 112, 310-329. 16 Cropanzano R. & Wright TA. A 5-Year Study of Change in the Relationship Between Wellbeing and Job Performance. Consulting Psychology Journal: Practice and Research 1999; 51, 252-265. 17 Diener E, Biswas-Diener R. Will Money Increase Subjective Well-Being? A Literature Review Guide to Needed Research. Social Indicators Research 2002; 57, 119-169. 18 Iverson RD, Olekalns M, & Erwin PJ. Affectivity, Organizational Stressors, and Absenteeism: A Causal Model of Burnout and Its Consequences. Journal of Vocational Behavior 1998; 52, 1-23. 19 Feingold A. Happiness, Unselfishness, and Popularity. The Journal of Psychology 1983; 115, 3-5. 20 Barsade SG, Ward AJ, Turner JDF, & Sonnenfeld JA. To Your Heart’s Content: A Model of Affective Diversity in Top Management Teams. Administrative Science Quarterly 2000; 45, 802-836. 21 Herrbach O. A Matter of Feeling? The Affective Tone of Organizational Commitment and Identification. Journal of Organizational Behavior 2006; 27, 629-643. 22 Carver CS. Pleasure as a Sign You Can Attend to Something Else: Placing Positive Feelings Within a General Model of Affect. Cognition and Emotion 2003; 17, 241-261. 23 Bell PA. Affective State, Attraction, and Affiliation: Misery Loves Happy Company, Too. Personality and Social Psychology Bulletin 1978; 4, 616-619. 24 Estrada C, Isen AM, & Young MJ. Positive Affect Influences Creative Problem Solving and Reported Source of Practice Satisfaction in Physicians. Organizational Behavior and Human Decision Processes 1994; 72, 117-135. 25 Kaplan DA. 100 Best Companies to Work for 2010. Fortune Magazine www.money. cnn.com/2010/01/21/technology/sas_best_companies.fortune/index.htm. 26 Gallup Study Indicates Actively Disengaged Workers Cost US Hundreds of Billions Each Year. Gallup Management Journal. www.gmj.gallup.com 2001; posted March 19. 27 Cost of Lost Productive Work Time Due to Depressive Disorders in the U.S. Workforce, JAMA 2003; 289, 3135-3144. 28 Rego A, Pina e Cunha M. Do the Opportunities for Learning and Personal Development Lead to Happiness? It Depends on Work-Family Conciliation. Journal of Occupational Health Psychology 2009; 14, 3, 334-348. 29 Fordyce MW. Development of a Program to Increase Personal Happiness. Journal of Counseling Psychology 1977; 6, 511-521. 30 Salovey P, Brackett MA, & Mayer JD. Emotional Intelligence: Key Readings on the Mayer and Salovey Model. 2004; New York: NPR Inc. 31 Vance DE, Wadley, VG, Ball KK, Roenker DL, & Rizzo M. The Effects of Physical Activity and Sedentary Behavior on Cognitive Health in Older Adults. Journal of Aging and Physical Activity 2005; 13, 294-313. 32 Koopmans TA, Geleijnse JM, Zitman FG, Giltay EJ. Effects of Happiness on All- Cause Mortality During 15 Years of Follow-Up: The Arnhem Elderly Study, Journal of Happiness Studies 2008; DOI 10.1007/s10902-008-9127-0. 33 Schnohr P, Kristensen TS, Prescott E Scharling H. Stress and Life Dissatisfaction are Inversely Associated With Jogging and Other Types of Physical Activity in Leisure Time - The Copenhagen City Heart Study. Scandinavian Journal of Medicine & Science in Sports 2005; 15, 107-112. 34 Lyubomirsky SL, Sheldon KM, Schkade D. Pursuing Happiness: The Architecture of Sustainable Change. Review of General Psychology 2005; 2, 111-131. 35 Mobily KE, Rubenstein LM, Lemke JH, O’Hara MW, & Wallace RB. Walking and Depression in a Cohort of Older Adults: The Iowa 65+ Rural Health Study. Journal of Aging and Physical Activity 1996; 4, 119-135. 36 Sexton H, Maere A, & Dahl NH. Exercise Intensity and Reduction in Neurotic Symptoms: A Controlled Follow-up Study. Acta Psychiatrica Scandinavica 1989; 80, 231-235. 37 Greist JH, Klein MH, Eischens RR, Faris JW, Gurman AS, & Morgan WP. Running as a Treatment for Depression 1979; 20, 41-54. 38 Doyne EJ, Ossip-Klein DJ, Bowman ED, Osborn KM, McDougall-Wilson IB & Neimeyer RA. Running Versus Weight Lifting in the Treatment of Depression. Journal of Consulting and Clinical Psychology 1987; 55, 748-754. 39 Doyne EJ, Chambless DL, & Beutler LE. Aerobic Exercise as a Treatment for Depression in Women. Behavior Therapy 1983; 14, 434-440. 40 ISSP. Physical Activity and Psychological Benefits: A Position Statement. The Sport Psychologist 1992; 6, 199-203. 41 Biddle S. Exercise Emotions and Mental Health. In YL Hanin (Ed.), Emotions in Sport. Champaign, IL: Human Kinetics 2000; 267-291. 42 Burbach FR.The Efficacy of Physical Activity Interventions Within Mental Health Services: Anxiety and Depressive Disorders. Journal of Mental Health 1997; 6, 543-566. 43 Martinsen EW. Therapeutic Implications of Exercise for Clinically Anxious and Depressed Patients. International Journal of Sports Psychology 1993; 24, 185-199. 44 Mutrie N & Biddle SJH. The Effects of Exercise on Mental Health in Nonclinical Populations. In SJH Biddle (Ed.) European Perspectives on Exercise and Sport Psychology. Champaign, IL: Human Kinetics 1995; 50-70. 45 Simmons AD, Epstein LH, McGowan CR, Kupfer DJ, & Ropertson RJ. Exercise as a Treatment for Depression: An Update. Clinical Psychology Review 1985; 5, 553-568. 46 Tkachuk GA & Martin GL. Exercise Therapy for Patients With Psychiatric Disorders: Research and Clinical Implications. Professional Psychology, Research and Practice 1999; 30 275-282. 47 Wankel LM & Berger BG. The Personal and Social Benefits of Sport and Physical Activity. In BL Driver & PJ Brown (Eds.), Benefits of Leisure, State College, PA: Venture Publishing 1991; 121-144. 48 Martinsen EW. The Effects of Exercise on Mental Health in Clinical Populations. In SJH Biddle (Ed.), European Perspectives on Exercise and Sport Psychology. Champaign, IL: Human Kinetics 1995; 71-84. Creating a Culture of Happiness | 6
  8. 8. Health Enhancement Systems 712 Cambridge Street Midland MI 48642 800.326.2317 www.HealthEnhancementSystems.com For more white papers to support wellness at your organization, free from Health Enhancement Systems, go to: http://whitepapers.HealthEnhancementSystems.com. For Wellness Resources, a guide to our suite of online and paper-based wellness products, go to: http://hesonline.com/catalog.aspx. Copyright © 2011, Health Enhancement Systems. No part of this document may be distributed, reproduced, or posted without written permission from Health Enhancement Systems.