Happy Workers and Performance October 2010
Researchers once thought job satisfaction to be unrelated to relevant performance-related outcomes for companies, but new research reveals that job satisfaction causes changes in financial performance. Specifically, Gallup (Washington, D.C.) researcher James Harter and colleagues show that employees who have access to equipment and materials they need, feel cared for, are able to focus on their strengths, and see recognition of their achievements are more likely to stay with an organization (up to 50% more likely than are unhappy workers), improve sales and customer loyalty, and ultimately contribute to the financial performance of the organization (up to 4% higher annual revenue than unhappy workers produce).
Independent of these findings, companies have begun relaxing the work environment to promote workers' satisfaction and drive results. Netflix (Los Gatos, California) recently implemented a liberal vacation and expense policy: Workers take as much vacation as they want at any time, and they do not need prior approval for travel and entertainment expenses, taking into account some coordination requirements. Similarly, Aurora Health Care (Milwaukee, Wisconsin), CVS Caremark (Woonsocket, Rhode Island), Northrop Grumman Shipbuilding (a division of Northrop Grumman; Century City, California), and System Sensor (St. Charles, Illinois) offer incentives for employees to purchase a house. According to a Center for Housing Policy (Washington, D.C.) study, Aurora employees who received assistance "are proving to be better-performing employees who choose to stay with the organization longer."
A looser structure, providing more individual freedom, also promises some surprising health benefits, including reduced costs and improved performance. Research by the Cooper Institute (Dallas, Texas) shows that men who primarily sat during the day were more likely to develop serious health problems (for example, heart attacks)—even if they exercised regularly during their lunch hour. Policies to decouple workers from computer screens and to offer opportunities to move more frequently may promote both health and happiness in the long run and increase company revenues.
Whether these and similar approaches to increase worker satisfaction to improve productivity become more mainstream remains a question, but the provided data points suggest a more conscious approach to related human-resources policies.