Myth or Science?

"Happy Workers Means Happy Profits"

There are exceptions, of course, but this is basically true. A glance atFortune'sBest Companies to Work Forreveals a list of recognizable profit leaders: Google, SAS, Edward Jones, and REI, to name a few. However, all happiness is not created equal.

An employee who is happy because her coworker did most of the work on her team's projectisn't necessarily going to work harder that day, for instance. Some happiness-inducers also seem unrelated to profit increases, such as Google's bowling alley and Irish pub, Facebook's free chocolate lunches, and Salesforce.com's off-the-charts parties. Traditional benefits programs also don't necessarily yield higher job satisfaction, productivity, and profits. Research indicates employees highly value paid time off, a retirement plan such as a 401(k), and lower health premiums. But many companies offer their employees these benefits and are nowhere near the Fortune 500 organizations in profits.

It turns out that the value of happiness in the profit equation may be felt in the level of employee engagement. As Julie Gebauer, a managing director for Towers Watson, says, "It's not just about making them happy - that's not a business issue. Engagement is." Job engagement "represents employees' commitment ... and the level of discretionary effort they are willing to put forth at work," writes Jack in the Box's Senior VP Mark Blankenship. Happy employees with higher job engagement are willing to work hard, make customers happy, and stay with the company - three factors that affect the bottom line in a big way Conversely, a review of 300 studies revealed that turnover rates resulting from poor attitudes or low engagement led to poorer organizational performance.

So the moral of the story seems to be this: Treat others as we want to be treated in the workplace. It's just good business.

Sources: M. H. Blankenship, "Happier Employees + Happier Customers = More Profit,"HR Magazine(July 2012), pp. 36-38;; A. Edmans, "The Link Between Job Satisfaction and Firm Value, with Implications for Corporate Social Responsibility,"Academy of Management Perspectives(November 2012), pp. 1-19; "Getting Them to Stay,"Workforce Management(February 2013), p. 19; J. K. Harter et al., "Causal Impact of Employee Work Perceptions on the Bottom Line of Organizations,"Perspectives on Psychological Science(July 2010), pp. 378-389; T.-Y. Park and J. D. Shaw, "Turnover Rates and Organizational Performance: A Meta-Analysis,"Journal of Applied Psychology(March 2013), pp. 268-309; and J. Waggoner, "Do Happy Workers Mean Higher Profit?"USA Today(February 20, 2013), pp. B1-B2.

1. On the "Assess your Job Satisfaction", what were your highest and lowest facets? Why do people vary in their highest and lowest facets?Why is it important that you are aware of anemployee's highest satisfaction facet?

2. Describe a situation in which you knew workers/employees were happy with their company and engaged with their jobs.

3. Discuss why employee engagement is essential to a satisfied workforce.