Professor of Business and Personnel Economics, Andrew Clark and Yannis Georgellis, Professor of Management, make the case for putting wellbeing and satisfaction of staff at the top of a business agenda.
Anyone who has picked up a book on economics can tell you that firms who can produce more output from a given input are said to be more ‘productive’.
But while office buildings and machines cannot decide how hard to work (although we all may have doubts about the office photocopier…), people can. In what sounds like a contradiction, firms may be able to increase profits by raising costs – because better-paid workers work harder.
The original context of this finding was within manual labour. Higher wages improved nutrition, health and the physical ability to work. However, now that most jobs are non-manual we look at mental health. Happy employees furnish more effort in their job roles.
As satisfied employees are more open to collaborative work, more tuned-in to work based opportunities, more helpful to colleagues, more confident and more motivated, they often accomplish more. A recent Gallup poll showed that 70 per cent of Americans are disengaged from their work and this is costing the country a staggering $550 billion annually.
How can we make staff happy?
Higher wages could be one way to improve how content staff feel, but research has shown that less tangible rewards may also do the trick. Data from the 2015 International Social Survey Programme shows that while men value income more greatly, women hold job security and flexible working hours in higher regard.
If happy employees are more productive employees, perhaps it is time to rethink whether happiness can replace profit as a business model. It deserves serious consideration as a potentially credible one, especially today when human capital, along with brand capital, accounts for most of modern companies’ value.
Professor Yannis Georgellis teaches on the MSc Human Resource Management programme at Kent Business School, part of The University of Kent. Find out more about the MSc Human Resource Management programme.