Employee Happiness - Input or Outcome?

When the HR director at SAS was asked about the logic behind the vast array of benefits and services that SAS provides to its employee, he famously replied - “…there is nothing altruistic about all this. This is a for-profit business. we do all this because it all makes good business sense". SAS CEO Jim Goodnight went on to add - "I keep my employees happy and they keep my customers happy.”

So do happy people help a company make more profits? 

Research definitely shows that it does – Thomas Wright, professor at Fordham University, claims employee happiness accounts for as much as 10-15 percent of the variance in performance between different employees. 

Another research shows that at work, happy people are: 31 percent more productive, 40 percent more likely to receive a promotion (people like happy people), Less absent, with 23 percent fewer fatigue symptoms, Up to 10 percent more engaged at work, and are able to sell more – happy sales people produce 37 percent greater sales.

But what’s the happiness route?

Both Job satisfaction and engagement principles are rooted in happiness concept. So is job satisfaction the route to happiness or does happiness take the engagement way?

According to me job satisfaction and engagement take completely opposite routes to happiness.

Job satisfaction school of thought has believed that employee must be made happy. And if an organization can do so then these happy employees would be more productive. So, organizations simplify work, reduce work hours, dole out benefits etc., to make their employees happy, in anticipation that this will make them work harder. However this theory has largely not worked, for if it had then all our Indian PSU establishments would have been in Fortune 500. I have nothing against these PSUs but then we all know barring one or two none of them have really done well. Look at the pitiable state of organizations like Air India, Indian Railways, state electricity departments, waterworks and we know that despite these government institutions driven by the socialist view of the world have tried to do everything to keep their employees happy, the results have not necessarily been rosy.

On the other hand, the Engagement school of thought believes that the organization should do everything possible to maximize chances and opportunities for an employee to contribute. So if an organization provides benefits then it does not do so to make employees happy rather it does so to take away the worries from the mind of the employees and hence leave a large part of his/her mindshare for thinking about work. Companies like SAS understand and take care of their employees and their families; in turn employees get more time to take care of the company and its customers. Similarly at workplace the entire leadership, all resources, facilities and systems work towards making sure that the employee finds more avenues and interest to contribute. When an employee finds such a space, he/she can effectively contribute; it also maximizes his/her achievements and consequently the recognition & the rewards. Higher pay-offs and a sense of achievement & fulfillment lead to Happiness.

In short, while job satisfaction school of thought treats happiness as an input, engagement school of thought treats happiness as an output! Evidence from practice and research shows that the latter approach has worked much more than then the former.

Recently the IT mega city in India Bangalore has been plagued by high attritions amongst doctors. With the rapid mushrooming of private multi-specialty hospitals in the city the demand for quality doctors has multiplied many folds and has reportedly brought poaching talks in the board rooms of such organizations. But money isn’t the only reason why doctors quit. In fact a city newspaper recently quoted a senior doctor, when asked about the reasons of high attrition, stated - “There are only two reasons why doctors chose to move out. Either it is due to the administrative differences or because there is no equitable distribution of finances. Administrative differences happen when a person who is not from a medical background is involved in the decision-making process. This would mean that a doctor would have to wait for long for their equipment as that person in the administration does not understand the need for it. This would only halt his career move which is why he would choose to shift his practice.”  

In this case an uncooperative and non-supportive administration robs the doctors an opportunity to contribute; creates an environment that frustrates the professionals and forces them to leave. No amount of money or benefits is able to arrest such an outflow. ‘Satisfaction’ theory fails once again.

Contemporary research has also challenged another traditional ‘satisfaction’ anchor – the ‘work-life balance’. The problem with work-life balance is that it considers only the work hours and not whether the work is meaningful or not. Research shows that a meaningful work is of far greater value than necessarily lesser work hours. This is not to take away the concept of manageable work hours but then it is not the determinate. When an employee find meaningful work, it gives him/her far greater opportunity to contribute, succeed, achieve and be recognized & rewarded for the same. The outcome is happiness and engagement.

In fact Gallup has gone on record to state that – “Don't Pamper Employees -- Engage them! Satisfied or happy employees are not necessarily engaged. And engaged employees are the ones who work hardest, stay longest, and perform best.”

So keep your employees happy but make sure it is an outcome and not an input. Take the engagement route to happiness!

Bibliography

Kamath, V. (2014, 01 20). With hospitals boom in the city, doctors jump jobs for greener pastures. Bangalore Mirror.

Pfeldt, E. (2012, 12 27). Gallup: How Employees' Well Being Affects the Bottom Line. Forbes. Retrieved from http://www.forbes.com/sites/elainepofeldt/2012/12/27/gallup-why-leaders-cant-afford-to-ignore-employees-well-being/

Simson, N. (2014, January 21). Productivity Hacks: Happy People Are Productive People. Retrieved from Linked in: http://www.linkedin.com/today/post/article/20140121000342-1291685-productivity-hacks-happy-people-are-productive-people

Sorenson, S. (July 02, 2013). Don't Pamper Employees -- Engage Them. Gallup Business Journal. Retrieved from http://businessjournal.gallup.com/content/163316/don-pamper-employees-engage.aspx

Tandon, Y. (February 02, 2012). Why Work-Life Balance Isn't Balanced. Gallup Business Journal. Retrieved from http://businessjournal.gallup.com/content/152204/why-work-life-balance-isn-balanced.aspx