A supervisor's disposition and actions can influence the productivity of their entire team. However, a more cheerful manager generally leads to more content staff, which typically benefits both the organization's profitability and its standing in the marketplace.
TL;DR
- Happier employees are more profitable and productive, benefiting company performance and stock price.
- Leaders' own happiness is crucial for creating psychological safety and fostering authentic workplace connections.
- Workers desire authentic connections, skill enhancement, input consideration, and operational effectiveness.
- Leaders have an ethical responsibility to work on their own happiness as a gift to their teams.
This is the finding from Arthur C. Brooks, a professor at Harvard who instructs on leadership and happiness at the Harvard Kennedy School and the Harvard Business School. Addressing attendees recently at Harvard Business School’s Klarman Hall for an episode of the HBR IdeaCast, Brooks stated “happier employees are more profitable, more productive employees. That’s just the way it is. If you can have a happier workforce, you’re going to have a better company. And the results are going to be there.”
Brooks, a widely read author whose latest publication Build the Life You Want was developed in collaboration with Oprah Winfrey, stated that individuals in leadership roles who understand how to place a premium on their contentment will discover it “really, really is a good investment.”
The business rationale for workplace well-being
Findings from Irrational Capital, an investment company on Wall Street that Brooks has consulted for, reveal a distinct financial correlation between employee happiness and company performance. This organization examined information from 7,500 publicly listed corporations, encompassing all of the S&P 500 and the Russell 1000.
“What they find is, for example, if you’re in the top 20% of workplace well-being, you will be, on average, about 520 basis points above the S&P 500 in your stock price over the past year,” Brooks said. “This stuff is really performing. It really, really is a good investment.”
Separate research from the University of Oxford has further solidified this link, discovering that a one-point increase in employee happiness scores was associated with billions in extra yearly earnings.
What workers want
Brooks contended that businesses frequently misinterpret what contributes to employee contentment. When technology companies in Silicon Valley poll their staff on what might boost their job fulfillment, “the employees don’t know. They just know they’re not happy. And so they’ll say stuff like, I don’t know, a ping pong table. How about avocado toast?”
Brooks attributed this gap between what companies offer and what employees need to a deeper issue: leadership disconnection. When a boss is stressed, isolated, or unhappy—conditions he noted are nearly universal for new CEOs—they struggle to create the psychological safety and attentiveness that employees crave.
“The number one predictor of somebody hating their job is a bad boss,” Brooks said. “And it has a lot to do with the character, personality, and leadership style of the boss. If you’re the boss, you can ruin the workplace very, very quickly.”
This impact functions via what psychologists term emotional contagion, signifying that an employee's contentment and involvement are directly shaped by their manager’s emotional state and their attendance. A manager focused on their own health is more capable of hearing, enabling their staff, and fostering the environment for authentic workplace connections to thrive.
Brooks states that personnel desire four particular elements: authentic connections with colleagues, a sense of agency and skill enhancement in their roles, supervisors who heed their input, and operational effectiveness (avoiding unproductive time spent in superfluous gatherings).
The leadership trap
It's common to desire advancement in one's career, seeking new challenges and the numerous benefits associated with increased duties. However, Brooks stated that the primary emotions experienced by chief executive officers during their initial two years in the role are not happiness or satisfaction. Rather, they feel isolation and frustration.
This is consistent with wider studies indicating that roughly half of CEOs report feelings of isolation, as 70 percent of new leaders report that isolation has an adverse impact on their effectiveness.
“A lot of them are really caught by surprise because once again, your ancient limbic system says, climb, man, the brass ring,” Brooks said. “That’s where it’s at. It’s going to be so great. And they get there, and they don’t like it.”
For Brooks, his main goal is training managers with a specific goal: “to be happy people.”
“That’s the number one predictor of being a good boss is working on your own happiness,” he said.
He likened the situation to raising children, rejecting the widely held notion that parents are “never happier than your unhappiest child” as fundamentally flawed. “That’s just bad parenting, straight up, because nobody wants to have an unhappy mother or father. And nobody wants to have an unhappy boss.”
“If you’re in any position of leadership, you have an ethical responsibility to be working on your happiness because it’s your gift to the people over whom you’re a steward,” he said.
You can watch the full talk with Brooks and Harvard Business Review’s Adi Ignatius below.
For this story, Coins2Day generative AI assisted in creating a preliminary version. A human editor confirmed the data's correctness prior to its release.