
Employee happiness and business success are linked - benryon
https://www.economist.com/business/2019/07/28/employee-happiness-and-business-success-are-linked
======
achenatx
I use a book called "first break all the rules"

It is also based on gallup data. They determined that employee happiness was
not correlated to company success. They did find that the following questions
in order were highly correlated to company success.

1\. Do I know what is expected of me at work?

2\. Do I have the materials and equipment I need to do my work right?

3\. At work, do I have the opportunity to do what I do best every day?

4\. In the last seven days, have I received recognition or praise for doing
good work?

5\. Does my supervisor, or someone at work, seem to care about me as a person?

6\. Is there someone at work who encourages my development?

7\. At work, do my opinions seem to count?

8\. Does the mission/purpose of my company make me feel my job is important?

9\. Are my co-workers committed to doing quality work?

10\. Do I have a best friend at work?

11\. In the last six months, has someone at work talked to me about my
progress?

12\. This last year, have I had opportunities at work to learn and grow?

~~~
tdsamardzhiev
What do you mean when you say employee happiness? Because this list is pretty
much what I'd reckon constitutes employee happiness.

~~~
RomanBob
For you.

Some people just want to sit for 8 hours, go home, and watch football.

~~~
tdsamardzhiev
So you let them sit for 8 hours, go home and watch football. What's next?
They're happy forever and don't bother you? No, it's likely something from the
list.

~~~
Qwertystop
The list seems likely to be important, but I note that no form of material
compensation is listed, and even people who don't particularly care for
material wealth will probably put food-and-shelter above most or all of that
list (with a possible exception for point 8, with people and companies that
have a particularly strong Cause).

~~~
ticmasta
Study after study provides evidence that compensation is the most important
motivator up to some individual range/level, at which point its leverage
quickly tapers off. Food & shelter would definitely be below the cut-off but a
5% increase could be huge for some and meaningless for others. The challenge
is everyone's curve is going to be different.

This list jives with the internal motivators that appear to drive really great
work _above_ the survival level: safety, opportunity and recognition.

------
ergothus
I've seen these arguments repeatedly, yet I only see this mattering to those
companies where employees have a relative level of power and choice (e.g. non-
game industry programmers, etc). Elsewhere, the attitude appears to have
remained: "use them as much as possible". Consider assistant managers at your
local chain store. Pick a chain! Outside of a handful of companies that are
well noted for their bucking of the trend, regardless of market, these
employees will be used and abused, year after year. If my anecdotal experience
is representative, the more they actually care about the job, the more they'll
be abused. Managers get the same, and by the time you get to district or
regional managers, they are mostly the people that survived the lower
levels...where "survived" means "did the abusing" not "got burnt out and quit
for greener pastures".

~~~
nine_k
Why, this makes sense.

In every industry, there are employees whose influence on the company success
is outsized, and who are hard to hire or train. In software industry, they are
experienced engineers and product managers. In a fashionable restaurant, they
are experienced cooks. In an airforce, they are experienced pilots and
repairmen. Etc.

When these people are happy with their work, they achieve great results. When
they are unhappy, they look for ways to conveniently jump ship, because they
have a number of opportunities elsewhere waiting for them to become available.
They are in short supply. Every boss has an incentive to keep these people
content and loyal.

OTOH every industry has positions for which supply is plentiful, compared to
demand. Aspiring game developers without experience, dish washers, burger
flippers, etc, can be readily hired, paid little, and easily fired, too. There
is no incentive for their bosses to walk an extra mile to keep them happ,
especially when pressing them a bit more yields an extra bit of performance,
so they mostly aren't happy about their jobs.

~~~
rednerrus
Look at the success Trader Joe's and Costco have had. Either company could
replace the happy, experienced checkers, who care about what they're doing and
how they're doing it with $10/hr people who have no stake in what's going on.
The important distinction is the stake that your employees take in what's
happening.

The people who are closest to and most affected by problems are the best
suited to solve them. If you hire a fleet of people who don't care about
solving those problems, they won't get solved. You hire a fleet of people who
give a shit day in and day out, you're going to get those nagging issues that,
in the long run, cost you the most.

Those companies that think that boots on the ground are replaceable in any
industry overestimate the importance of management.

I rely on my people to keep me abreast of the issues, as a manager, that I
need to be aware of. I expect them to fix the issues that are within their
power to fix and escalate the rest of them.

~~~
profalseidol
Ultimate stake is that the employees are also the owners themselves.

~~~
nine_k
This is why a (small) grant of stock, or at least options, is a typical way to
pay part of the compensation for higher-level employees.

------
robocat
They did look at causation: "the authors cite studies of changes within
individual firms and organisations which seem to show that improvements in
employee morale precede gains in productivity, rather than the other way
round."

Many of us understand the other causation arrow (corporate unsuccess leads to
unhappiness!)

~~~
mr_crankypants
A preceding B does not imply that A causes B, it only implies that B doesn't
cause A. Which doesn't really reduce the world of possible causal
relationships by all that much, since there may be any number of other factors
that weren't considered.

For example, it could just as easily be the case that adjustments to
dysfunctional aspects of the company's internal politics improve both morale
and productivity, but the morale change becomes apparent more quickly.

~~~
crimsonalucard
Correlation does not imply causation.

Little known trick to establish that A causes B is to trigger A at will and
see if a B is observed.

If you trigger A 100 times and it precedes a B 98 times then you have
established causation to a degree. Similar to the correlation coefficient
there must be some causation coefficient.

~~~
rightbyte
You might imply it, but not triggering A should give less B than triggering A,
too.

"Turning on my TV at 5 a'clock causes channel 4 to broadcast The Simpsons."

~~~
crimsonalucard
Good point. If B was just happening all the time, then a B would always happen
after A. Have to make sure the inverse is true.

Though if B happens all the time, but also A causes B. Then there's really no
way to establish causation.

"The Channel four studio has electrical sensors that will trip and broadcast
the simpsons either at 5pm or when I turn on my TV at 5pm."

------
ben_jones
People are joking in this thread but I think the REALLY BIG problem is that a
lot of American workers are increasingly internalizing their compensation
needs above other needs like health, happiness, or social well being. When we
should be concentrating on a lot of our personal issues, we kick the ball down
the road saying "oh when I have more money" or "oh when my career progresses"
when we would be much better served by acting on them immediately and with
highest priority.

~~~
klyrs
It's not just workers. I've repeatedly asked for reduced hours, or more
vacation, in lieu of a raise. Every time, my employer's response has been some
form of "we can't do that for unspecified technical reasons" or "if you get
that, everybody would want it." Honestly I don't get it. The big irony is that
several people in the upper strata who are ostensibly making these decisions
only work part-time and have at least 2 C-suite jobs

~~~
RhodesianHunter
Who has two C-Suite jobs? The people at that level are frequently the ones
working the longest hours.

~~~
jmalicki
Elon Musk has 3 (SpaceX, Tesla, the Boring Company).

Jack Dorsey has 2 (Square, Twitter).

Steve Jobs was CEO of both Apple and Pixar.

~~~
RhodesianHunter
So the three celebrity status CEOs out of a C-Suite population in what... the
high five figures?

~~~
klyrs
At least 2, at my unnamed company. Three mentioned celebrities who are easily
verified. And you're still incredulous. I don't know what to tell you, this
isn't that uncommon.

It's not that they don't work too much for their own good, and pay themselves
as much as they can get away with. It's that they don't see the need to show
up at my company every day, but somehow think that highly creative employees
perform better at a grindstone.

------
WheelsAtLarge
I worked for a company where management tried hard to keep employees happy
when it came to benefits and yet, for the most part, they/we were a miserable
bunch. It seemed that it was never enough. I'm not saying that the benefits
were extravagant but they were very good.

I agree that a happy employee helps a company be better but you can't buy
their happiness thru benefits. The way to do it complicated and it starts by
hiring the right type of employee and defining the right company culture.

~~~
danielvinson
Happiness isn’t just a factor of compensation, it’s also if people enjoy what
they are working on, how they work, and the people around them.

------
nabla9
The connection to profitability by industry is interesting:

    
    
        manufacturing 0.42
        finance       0.22
        retail        0.14
        services      0.10
    

Correlation coefficient < 0.20 is very weak correlation.

It would be interesting to see how it correlates with value added. I
hypothesize that low in value added businesses like retail or manual assembly
in manufacturing, you can't increase profits radically by increasing worker
satisfaction. In higher value added sectors like like aircraft manufacturing
_cough_ Boeing _cough_ the correlation is probably much higher than 0.42.

~~~
beck03076
You are right. These sectors have higher impacts on profitability by
increasing employee engagement. Computer Software, Internet, Information
Technology and Services, Marketing and Advertising, Health, Wellness and
Fitness

------
lettergram
My startup is working on identifying and maximizing happiness for this reason
[1]. Largely the reason we believe this is the case, is because people tend to
stay where they are happy.

“Tribal knowledge” is the single most important thing an employee can bring to
the table. It’s also only obtained through time at a given (or related
company). At the same time, hiring and training a new employee is the single
most expensive cost to a company. So identifying and keeping experienced
employees really improves productivity and reduces costs. Which makes it much
easier for a business to succeed.

[1] [https://metacortex.me/](https://metacortex.me/)

~~~
adfm
Take a look at the SMR/Glassdoor Culture 500 if you're interested in measuring
company culture.
[https://sloanreview.mit.edu/culture500](https://sloanreview.mit.edu/culture500)

------
frobozz
Ursine genes and woodland defecation also seem to correlate.

~~~
xyzzyz
Yes, I am also shocked to learn that employees aren't happy in companies that
aren't doing well. What's next, are you going to tell me that people who live
in successful cities are happier than those in decaying ones?

~~~
dougmwne
I know that's in jest, but boy have I experienced that one. There's nothing
like being surrounded by a whole city of people who've lost all hope to get
you out of bed in the morning.

------
lcuff
The fact that this idea is deemed worthy of an article in the Economist, and
then hits the front page of HN is, IMHO, a sad statement on the current
quality of thinking about how to run companies. It's hard for me to summon
anything but 'duh' in response to the headline. For intelligent commentary,
give me Peter Drucker's "The Effective Executive".

------
maehwasu
This seems intuitively obvious, and I say this as a former business owner.
However, the causality is backwards (as I’d expect from economists).

If things are going well, it usually means you have a monopoly of some kind,
which means high margins, which means that it’s easy and important to keep
your people happy (including stimulating/challenging them with non-rote work).

It’s when things go south that it all starts to get ugly for everyone.

The causality likely goes the other direction: successful businesses can
afford to create better employee environments. If your business sucks, you’ll
likely run out of money if you try to first make employees happy and then let
that happiness iterate you to success.

------
neonate
[http://archive.is/TErZI](http://archive.is/TErZI)

~~~
xtracto
[https://outline.com/vnwmK4](https://outline.com/vnwmK4)

------
izzydata
Amazon seems to be doing alright regardless.

~~~
umvi
I know a lot of engineers that work for Amazon that are happy. Warehouse
workers on the other hand...

~~~
Matticus_Rex
Warehouse work sucks. Amazon's warehouse work is above average for warehouse
work.

~~~
skyyler
By what metric? I have friends that have been working warehouses in Ohio since
the early 2000s and they have vented frustrations to me about how Amazon is
causing a race to the bottom for warehouse labor.

I've heard a lot of horror stories about Amazon warehouses. I'm sure a lot of
it is FUD or whatever, but it seems that even Walmart has better conditions.

~~~
hanniabu
Have you ever been in a real warehouse? One that's baking in the sun in the
summer, no AC because it's too costly, probably 100 degrees inside, no
ventilation, pallet dust everywhere and you get a nice inhale when something
is moved on the floor, not being in a technologically present company where
machines break constantly and you need to do a lot of manual work in these
conditions lifting a 35lb box every 8-12 seconds for 12 hours....

~~~
mjparrott
Yes, this was my first job as an 'employee' of a staffing company. They took
$11/hour and gave me $7/hour to re-package and re-palletize boxes of P&G
products. Literally we would open a box of 4 shampoo bottles, take the bottles
out and then repackage then into a box of 6 bottles and stack them back up on
a pallet. To open the boxes we put them on a conveyor belt that went through
an oven to melt the glue on the box. I had to stand at the exit of the oven
and grab the scalding hot glue and rip the tape off the boxes as fast as I
possibly could. The scalding hot glue would stick to your hands while hot air
was blowing in your face out of the oven. No AC. 8 hour shift 7 to 3 with no
lunch break, only two 15 minute breaks to use the bathroom (couldn't go
otherwise). No AC in the warehouse in the hot summer in the midwest.

Another fun job was to re-palletize boxes. A forklift operator would lay an
empty pallet on the ground, then put a row of 25 full pallets next to it in a
long row. You had to unstack the 2nd pallet onto the empty one using a new
stacking pattern that was more stable. Then the 2nd pallet would be empty.
Repeat the process down the row as fast as you can go getting cuts on your
hands from the cardboard boxes, leaning over your back lifting heavy boxes
without AC in a hot warehouse.

~~~
Noumenon72
My plastic factory issued Kevlar gloves, which prevent cuts from cardboard
boxes and actually let you work faster due to not having to be careful. A good
example where my happiness and business success were linked. Sorry it didn't
work out in your case.

I would like for those kind of jobs are staffed by a staffing company so
people can cycle through them rather than having to do it full time. I can put
up with a lot for a few weeks at a time.

------
lightedman
It's a shame YC/HN can't find an article that doesn't require signing-up to
read.

Given the huge amount of articles that require registration to read, and given
HN's supposed freedom of information bend, this seems incomprehensible.

Why can't the mods find a more usable article? Are you that bereft of
resources?

How about instead of whining about forcefully-conversant people like myself,
you actually allow the conversation to happen with an article that we can all
read? That's the point of this site, and if the mods can't allow that, they
should step down in favor of someone that can step up to the job.

In before dang and stcb only highlight this comment as 'why people are toxic'
while ignoring why they themselves are adding to the toxicity.

If either of you are actually REAL about your site rules, you'll e-mail me
explaining why, or you'll talk here.

Only cowards try to hide behind rules without a solid and concise explanation
of why they exist.

------
jpswade
How do you measure happiness anyway?

When I started in a management role, I set out to make sure my team members
were happy. As time goes on, oddly enough, you realise that happiness is not
chief among the qualities that make for a well functioning team.

I found it is more about an equilibrium or balance.

People don't always have to be happy, they have to be motivated.

------
randyrand
It's generally pretty clear that when a business is failing, the employees
won't be very happy.

------
beck03076
According to Gallup, highly experienced teams can experience a 20% lift in
productivity.

If an employee’s output is X, you can take this to (X)*120% by focusing on
employee happiness. To put this in perspective, if a 5 member team experienced
a 20% increase in productivity, there will be enough additional output that a
sixth employee might contribute, but without the additional pay.

In this scenario, an organisation’s savings can be connected to 1 employee’s
salary in a 5 member team. Also, take into consideration the additional
revenue generated.

If a 500 employee company saw a 20% boost in productivity, it will mean an
output of 600 employees at the hiring cost of 500.

------
mlthoughts2018
It reminds me some of Peopleware, where an argument is made that through a
focus on quality of output, the speed of production is actually faster than if
you focus explicitly on the speed of production.

------
simonebrunozzi
[https://outline.com/vnwmK4](https://outline.com/vnwmK4)

------
known
Due to self-actualization in
[https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs#...](https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs#Self-
actualization)

------
Double_a_92
Now the question is how they are linked. Does the business become successful
because you make your employees happy, OR can you afford to make them happy by
having a business that runs well?

------
atian
Businesses are systems of people. Those that affect people nonetheless affect
the business. You are then in the realm of which organs the people can survive
without.

------
xtat
You might be surprised how many otherwise skilled and well meaning people
would argue against this in their own companies, especially prevalent in the
bay area.

------
samnwa
It's the opposite. Business success (e.g. being able to pay people to work
less hard and enjoy free lunches, etc) is linked to happiness.

------
ourcat
"Founder passion" is everything.

And nothing you ever do will be as successful as something you're passionate
about.

------
LoSboccacc
can't read the article because limits. do that provide some source with the
claim? doesn't appear to be that the fortune 500 are particularly happy places
to be and would love to see that list correlated with Glassdoor votes.

~~~
visarga
> can't read the article because limits.

I often get annoyed at such articles. If they don't want to share, then don't
clog Hacker News, reddit and search engines with your amputated text! There
are plenty of sources. Same problem for JSTOR articles.

------
minusSeven
Could someone transcribe the article here? The website wants me to subscribe.

------
ThomPete
Business success and employee happiness are better linked.

------
wb14123
I think business success makes employee happy.

------
erikig
Linked as in causation or as in correlation?

------
mapcars
That is kinda obvious.

------
cromat3
AKA water is wet.

------
ph4
Serious question, why post something for discussion if it's behind a paywall?

~~~
tannerc
I'll bite because it's a reasonable question. I think linking to paywalled
content is allowed because there are fairly easy ways around paywalls, but
posting a roundabout directly goes (I believe) against HN policy.

An example of how to get around the Economist paywall is already elsewhere in
this thread.

~~~
tomhoward
> but posting a roundabout directly goes (I believe) against HN policy

Not true; it has long been customary for people to share paywall workarounds
in the comments, and the moderators welcome/encourage it.

~~~
tannerc
Comments yes, not as posts (possibly).

~~~
tomhoward
True, you’re meant to post the original source, not archive sites like
Archive.is or Outline.

But some sites like The Information now have paywall passthrough arguments you
can add to the URL, and they seem to be fine.

