Does Productivity Affect Happiness?

Does Productivity Affect Happiness?

It’s a common misconception for employers to think that higher salaries translate to happier employees and thus, increased productivity. But research tells us that there are more factors that affect happiness and productivity.

For companies thinking employee satisfaction isn’t important, here’s a shocking statistic: it’s costing American companies around $450 to 550 billion annually. Given only 13% of employees reported being engaged at work, this means that a shocking majority of adults don’t enjoy their job and this is a hefty price to pay for companies. So while companies think that finance, sales, marketing, and operations are more important, the truth is employees will perform these functions more effectively when they are happy and enjoy their work.

What Science and Research Says

The link between productivity and happiness has intrigued researchers as well as economists. Happiness is no longer viewed as a personal matter; rather, it is seen as a workplace issue where employers and the corporate environment play an important role in how happy or unhappy employees are – and thus, how productive or unproductive they are.

Happiness Translates To Productivity

A study conducted by economic researchers at the University of Warwick discovered happiness resulted in a 12% increase in productivity. On the other hand, unhappy workers were 10% less productive.  According to the research team, happy employees caused significant positive improvements on productivity.

One of the researchers, Professor Andrew Oswald, mentioned companies who invest in employee satisfaction and support have happier coworkers. In an example, Google employee satisfaction is at 37% due to their own happiness-based initiatives while financial incentives are no longer enough if companies want productive employees.

According to Authentic Happiness, a book written by psychologist Martin Seligman, his studies conclude that happy people received better results in performance evaluations as well as higher salaries.


A Happy Brain Works Better

According to the book The Happiness Advantage, written by Shawn Anchor, the brain works significantly better if a person is feeling positive. Additionally, the book says that individuals who are positive and happy can solve problems better and are more creative. Because of this, Anchor says that the role of organizations is clear: happiness leads to better profits, provided that companies take the necessary steps in improving happiness in the workplace.

Meanwhile, J.M. George published a research article stating that negative moves drive people into a different way of working. When people feel negative emotions, they become more critical of each other, which causes a warrior mode of thinking. This is because negative people focus on things that are going wrong while positive people stimulate other people to be constructive, generous, tolerant, creative, and non-defensive.

The Role of Personal Happiness and Relationships

This isn’t to say that the workplace is completely responsible for the happiness of employees. Individuals can, and should also take responsibility for their own happiness. There are things that employees can do to improve happiness, such as meditating, volunteering to help colleagues, or reflecting about things that they are grateful for at work.

Alexander Kjerulf, “Chief Happiness Officer” and founder of Woohoo Inc. says that happiness is the ultimate productivity booster. He opines that happy employees have better leadership skills, make smart decisions, and are skilled in time management.

Why Does Happiness Impact Productivity?

There isn’t one single explanation to answer why happiness and satisfaction affects productivity. Much of the research in this field points out to these reasons:

Increased dedication:

When employees are happy, they are basically saying they care more and feel more accountable about the job that they are doing. As a result, the increased attention to detail and dedication enhances productivity.

Drive to succeed:

Each person has a task they don’t enjoy. When an employee lands a job they do enjoy, this makes them happy and want to do better at it. This satisfaction increases their drive and satisfaction.


When employees are happy, they have no issues with referring companies or people to their employer whether it’s directly or indirectly. For instance, a referral could occur when an employee is overheard saying positive things about a company. On the other hand, employees can also tell their peers to conduct business with their employer.


While the numbers may differ, one thing is clear: there is a positive correlation between an increase in productivity and an increase in happiness. It is up to companies to find a way to enhance this in the workplace, and guide employees to avoid productivity killers.


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  4. Mark

    This article’s title is backwards. It asks if productivity affects happiness, but then discusses the reverse–how happiness impacts productivity. That’s not what I was expecting from the title. You really should correct that.