This post originally appeared in Forbes on November 28, 2023.
Caring about the well-being of your people at work is the moral thing to do — but it also makes business sense. A recent study published in Management Science finds that happiness increases productivity. The effects are large, as well. Each one-unit increase in happiness (on a scale of 0-10) led to a 12% increase in productivity. Productivity was measured by the number of sales employees made.
While the connection between happiness and productivity is fairly intuitive, isolating a direct link between the two is more difficult. Part of this challenge is inconsistent definitions of happiness and productivity. But companies also often struggle to measure happiness, and without that piece of information, it's impossible to link the two concepts.