Workplace Happiness As A KPI

Happier workers are more productive workers, but companies still struggle to make the link

Are you happy at work? What does workplace happiness look like? For Lord Mark Price, author, peer, and CEO of Engaging Works, workplace happiness is about engagement, involvement, and feeling respected. For Tony Latter, Head of Happiness Innovation at the Happiness Index, happiness is linked to connectedness, control, progress, and having a higher purpose. But unfortunately, a significant percentage of people are unhappy at work. So, what do businesses need to be doing to make their employees happier, and should workplace happiness become a primary marker for corporate performance?

What does it mean to be happy at work?

While most individuals would describe happiness as contentment or comfort, it is different for different people. Being happy at work, however, is more than simply being content or comfortable. For Price, workplace happiness is a combination of six things: rewards and recognition, information, empowerment, wellbeing, pride, and job satisfaction.

“If you take all of those things together, they are the building blocks for whether you’re happy at work. You can be happy if one of two of those things aren’t right. But, if you don’t feel you are fairly paid, you’re not given the information to work well, you don’t have a good relationship with your manager, and you don’t think you’re doing something of much value, then I would put a large wager on the fact that you’re not happy at work,” he says.

Price founded Engaging Works in 2017 to get more people thinking about and, as a result, actively improving workplace happiness. The company provides recruitment, retention, and communication support for organisations, as well as advice and resources for individuals. Similarly, The Happiness Index encourages the evolution of organisations’ cultural health, via short surveys and an employee to employer feedback service called Always On.

“To create sustained happiness, companies need to evolve from the culture of drinks on a Friday, and Pizza Thursdays,” says Latter. “Obviously this doesn’t hurt, but creating sustained happiness is not a quick fix. Companies need to focus on creating the right environment which their people will enjoy coming to. A good starting point to improve workplace happiness is to give people a greater sense of control over their work.”

Both Engaging Works and The Happiness Index try to quantify happiness in a practical way, taking objective measurements through surveys. But is it really possible to measure happiness objectively? Much like the six considerations suggested by Price, Latter also favours a step by step approach.

“The most effective way we are seeing happiness measured is via a model produced by a company called Delivering Happiness,” he says. “They’ve created a model which asks questions on seven areas of our working lives to create a Happiness Index for the individual and organisation. The seven areas are connectedness, control, happiness, progress, higher purpose, values, and organisational systems.”

Taking note of the numbers

Are organisations taking workplace happiness more seriously? If they aren’t, they should be. Back in 2015, a survey by the Social Market Foundation showed that people who had been exposed to comedy clips were up to 20 per cent more productive. That doesn’t necessarily mean that employers should hire comedians to entertain their workers, but it shows a clear correlation between happiness levels and productivity.

Despite a greater focus on employee wellbeing, a 2017/18 Labour Force Survey found that stress, depression or anxiety accounted for 57 per cent of all working days lost due to ill health. So, not only are unhappy employees less productive, but they are also less present. Unsurprisingly, these statistics have encouraged businesses to think hard about happiness. Another driver for change is millennial attitudes to work.

“Before millennials, people accepted that work perhaps wasn’t always nice or comfortable. There was a great deal of reverence to the hierarchy which existed in business. But what you find with millennials is that they think differently,” explains Price. “They think about a sense of purpose, working for companies that do good, and their own personal development.”

Happier workers, higher profits

Companies allocate huge budgets to customer research, while their spending on employee wellness is comparatively low. But, by investing in the happiness of their workforce, companies inadvertently drive productivity and profit. Happier people work harder, have better relationships with their coworkers, and are less likely to look for work elsewhere. According to Price, it costs between £1,000 and £5,000 to recruit somebody new. If retention is low, costs will soar, and this will impact the entire organisation.

“It’s a chicken and egg scenario,” says Price. “If your focus is first and foremost on the people that you employ and on their happiness, a consequence of their happiness is that they will deliver higher levels of customer service, and make a better profit. As a consequence, shareholders will be happier.”

“Improving the employee experience is on the agenda for most companies we speak to and they are recognising the benefits of improving staff happiness. Benefits include greater productivity, greater retention and a reduction in stress to name a few,” confirms Latter. “We are seeing more and more companies include staff happiness in their KPIs. Happiness of staff is also being discussed at greater length in board meetings.”

It comes as no surprise that the UK government has begun to place more emphasis on workplace happiness as a key performance indicator. This includes taking a greater interest in workers’ mental and physical health, and encouraging organisations to put employees on their boards.

“Increasingly, legislation is moving in this direction. When you consider the cost of running the National Health Service, at some point you want employers to be more preventative or proactive about employee health. Long before the NHS was ever formed, there were doctors in John Lewis department stores that offered chiropody and physiotherapy simply because the founders knew there was a benefit in keeping their employees healthy at work,” says Price.

Even if workplace happiness doesn’t become a legally enforced KPI, it’s likely to cross the mind of any prospective employee. Knowing that their potential coworkers are happy in their jobs could easily convince someone to join the business. Engaging Works is currently building a list of the happiest companies to work for, with a view to publicising the happiness levels of employees. A high rating will encourage more people to join the organisation, attracting individuals who care about the ethics and culture of their workplace. Tools like this will continue to demonstrate the importance of improving employee happiness – and not just because it’s the right thing to do.

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