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Does Making Your Team "Happy" Really Improve Productivity?

There is no arguing against the point that creating the right culture is a critically important factor in improving team productivity. As a Finance Leader you probably spend a great deal of time in ensuring that your employees are as productive as they possibly can be, and most likely, part of that process involves assessing whether your employees are “happy” or not, whilst also working out ways to improve their job satisfaction. An unhappy employee won’t be productive, right?

Perhaps, but it’s not quite that simple. In fact, the interconnection between happiness and productivity is so complex that there’s a whole stream of management study and research dedicated to it. Let’s take a look at some of the key points in this debate.

Happiness is subjective and eludes concrete measurement
What is happiness? Well that is the question, and a question years of study and many different disciplines have tried to answer. Scientifically, it is possible to measure emotions, but as a contrary stream of research would suggest, this “measurement” relies on simplified notions of what it means to be human. And even from a layman’s standpoint, we can understand that happiness is subjective, so translating that to the business environment is riddled with challenge. For example, feeling you are working in a supportive team environment structured by open plan working stations and group brainstorming sessions might make one person happy, whilst in the same situation, the idea of not being able to retreat to an office to make complex decisions might make another person very unhappy.

Making your team happy can actually reduce their ability to perform well
Even more of concern is the line of research that suggests that happiness can actually reduce productivity, in two ways. André Spicer and Carl Cederström examine this point in “The Research We’ve Ignored About Happiness at Work”. Firstly, they reason some research shows higher profits from businesses with less happy employees; and secondly, they demonstrate that happiness reduces ability in certain skill areas, for example areas that involve shrewd analysis, investigation and problem solving. Moreover, Daniel Gilbert in HBR’s interview series “The Science Behind the Smile” argues that research shows people can actually be more productive when they feel slightly anxious in their jobs, again illustrating the growing disconnect between happiness and productivity.

Trying to make your team happy can make them emotionally needy
Another point made clear by Spicer and Cederström is that the environment you create through the act of making your team happy can make your team emotionally needy, which almost certainly reduces productivity. They argue that if you build a culture based on steady recognition and praise, but stop this stream of emotional reassurance at any point, you risk an environment where employees overreact, experiencing accentuated feelings of rejection and neglect.

A focused mind is a happy mind
I think the most positive piece of commentary on this subject comes from Killingsworth in his examination of the future of happiness research. His wide-ranging research illustrates that actually, our minds “wander” over half of the time, and that, critically, this appears to lower people’s moods. He argues that “daydreaming”, even if positive, makes people less happy then when they are concentrating, and that actually, the key to happiness lies in a focused mind. This is not a new concept of course, and is well backed by other researchers who argue that in a work environment, employees are more motivated, and more productive, when given clear direction, and stretching goals in work.

As a concluding point, although the direct link between happiness and productivity is not clear, I think it would be foolish to ignore than happiness plays a contributing part in improving productivity, if not everyone’s productivity. Just like they way a millennial employee is motivated by different things than a baby boomer, it doesn’t mean in some cases the equation doesn’t have merit.

Working solely to make an employee happy might be bad for business, but working to make employees happy, through focusing goals and objectives to improve productivity, can only be good in the long run.

Read more:

Spicer, A., and Cederström, C., “The Research We’ve Ignored About Happiness at Work”, HBR
Killingsworth, M., “The Future of Happiness Research”, HBR
Gilbert, D., Stumbling on Happiness

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