10 Reasons Why Happy Employees Are 20% More Productive

Happy employees are more productive

Today’s average worker is more mindful about their happiness – as they should be. Most employees are now willing to quit their jobs if it hinders or obstructs their pursuit of happiness.

According to a Workopolis poll, 29% of respondents reported that they left their previous jobs because they were unhappy.

But that goal of happiness doesn’t come at the expense of productivity. Instead, it boosts work efficiency and output, and employers know this.

A 2015 study analyzed the relationship between happiness and productivity and found that happy employees are 20% more productive. Other studies have also shown that happiness boosts sales by 37% and task accuracy by 19%.

In this article, we’ll cover the main reasons why employees are more productive when they’re happy and how you can boost happiness in the workplace.

Does Employee Happiness Boost Productivity?

Absolutely. Happiness has to do with satisfaction, self-identity, and even self-worth.

According to Forbes, happy employees are ultimately more productive because they feel more valued.

Value, despite its many objective definitions, is closely related to perception. As a result, even though it is measured as a unit and gauge of productivity, value is a subjective quality of a person’s work. 

Therefore, when team managers say that someone is their most valuable employee, what they are saying is that that employee is the most productive individual among a group of others.

Consequently, a happy employee is more likely to be someone who is productive in the workplace than someone who is not because managers tend to prefer the former over the latter. 

This dynamic between value and productivity binds both concepts to employee happiness. As a result, business managers can confidently boost the productivity of their workspaces by tweaking the dynamic one way or another.

To tie it all up, apart from individual temperamental characteristics, the happiest employees tend to be the most productive employees. Even in the case of exceptions, a workplace that promotes warmth and friendliness among employees is more likely to have productive employees.

Take Gallup’s 2020 employee engagement meta-analysis for example. The “study of studies” found that organizations with highly engaged employees can more than double their chances of success over those with disengaged workers.

Why Are Happy Employees More Productive?

Now that we’ve established that happier employees are more productive, let’s tell you why.

1.     Increased Motivation

One of the effects of happiness on employees is increased motivation. Workers who are happy with work grow a sense of inner reward whenever they complete any task. This reward system is an effect of intrinsic motivation, which is the more sustainable type of motivation.

Motivation is one of the most cited components of productivity. Most productivity experts hold the view that a motivated employee is far more likely to do things efficiently and effectively compared to an employee that lacks motivation.

Motivation boosts mental and emotional energy, which serves as a core engine for quick and flexible thinking among employees. But in this respect, motivation and happiness are two sides of the same coin.

Happiness energizes employees as motivation does. A good way to conceptualize this effect is to imagine an employee that walks with a spring in their step. You can tell that such an employee is both happy and motivated. The consequence of this is productivity.

So, happiness fuels motivation, and motivation fuels productivity. Happiness energizes an employee and turns a workplace with happy employees into an electrifying space of positive attitude, creativity, and efficiency. These three factors, with motivation as a denominator, are reliable ingredients for workplace productivity.

2.     More Loyalty

Quiet quitting is one of the latest trends in workplaces. It is also one of the biggest nightmares of committed business managers. According to Gallup, 50% of the U.S workforce are quiet quitters.

But the main reason the trend is gaining momentum is that many employees around the world feel that they are not adequately appreciated. In other words, they are not happy because they do not feel valued. Consequently, they are not loyal to their employers and cannot be productive.

The FAAS Foundation and Mental Health America’s Mind the Workplace report found that lack of recognition caused workers to be unhappy at their organization.

McKinsey’s Great Attrition Research also reported that uncaring leaders is one of the major reasons for employees leaving their companies.

On the other hand, happy employees are loyal to assigned tasks, employers, and the organization in general. As a result, it is much easier to inspire them to be more productive in the shortest time possible.

3.     Improved Engagement

Employee engagement refers to the level of emotional and mental connection each employee has with their work, colleagues, and organizations. It essentially quantifies how workers feel about their workplaces.

Without question, a worker’s state of mind has an impact on their level of engagement, and that state of mind relies on the ambiance of the workplace.

A workplace that feels like a battleground is likely to produce angry and overly competitive employees. On the contrary, a workplace with positive and warm vibes is likely to produce happy employees.

In the latter scenario, business managers can wield their authority more effectively and direct the efforts and resourcefulness of their employees toward wholesome productivity.

So, employee happiness is next to positive employee engagement. Employees are at more liberty to share ideas among themselves and throw off the stress and tensions of the workplace when they are happy. Increased productivity can be expected with such healthy relations among team members.

4.     Healthier Workers

In the average 21st-century workplace, stress is synonymous with labor. 

The more an employee works, the more they are likely to fall ill, be weighed down by pressures, and become unhappy. 

But human beings are better equipped to manage stress when they are satisfied, feel good about themselves and their work, and are consequently happy. In this way, the happier an employee feels, the healthier they can be.

This Healthline article shows different studies backing up the fact that happy people make healthy life choices, from dieting to exercising.

The Gallup-Healthways Well-Being Index also reported that there is a serious connection between employee engagement and health.

Employee health is a significant determinant of workplace productivity. Workers who are working without having to worry about their health are more likely to fire on all cylinders.

Health consequently functions as an element of active commitment which is necessary for productive work. 

So, when employees are happy and thus better capable of managing workplace stress, they are able to turn up their productivity calibers.

5. Happy Employees Take More Calculated Risks

Despite the excitement that generally characterizes happiness, happiness in the workplace engenders attentiveness and consideration. 

Under a warm workplace ambiance, employees usually feel like they are important to their employers. This perception of trust encourages them to be more prudent, pay attention to detail, and always consider the organization’s big picture.

Beyond the individual ‘glow effect’ of happiness on attention to detail, workplaces that promote employee happiness invariably promote a free flow of information. As a result, employees have access to all they need to know about their work, especially its effects, and are more likely to be responsible in handling their duties. 

This translates to workers taking more time to consider their actions and therefore estimating the effects of these actions before they do them.

This is another reason ‘happy workplaces’ have more confident and independent employees. These employees can be relied on to get the job done without overworking their managers with unnecessary questions or waiting for directives at every turn.

6. They Are More Accountable

Employees are more likely to report to their superiors when they work within positive and enabling environments. This is because such employees do not feel awkward, afraid, or apprehensive whenever they approach their managers.

Similarly, team managers can more easily hold these employees responsible for the ups and downs of the workplace and perceived gaps in task execution.

Suspicion is the opposite of accountability in the context of the workplace. This element has a generally negative impact on workplace productivity and is more clearly identifiable where workers are unhappy, unmotivated, and untrusted. So, where workers are happy and consequently motivated, they (the employees) are reliable and accountable, and can readily earn the trust of their employers.

7.     Better Collaboration and Teamwork

In the same way that employee happiness boosts positive employee engagement in the workplace, it also strengthens collaboration and teamwork among employees. Trust in the workplace serves a very important role.

It opens up employees to their colleagues and superiors and lets them operate more seamlessly. However, trust does not appear out of thin air but requires some level of constant interaction or communication. And only workplaces that promote employee happiness can achieve this high level of interaction and trust.

So, happy employees tend to collaborate with their colleagues in a healthy manner. They socialize naturally and can consequently reinforce agreeable workplace bonds. 

Over time, this leads to increased friendliness in the workplace, which eventually translates to an increased willingness among employees to collaborate on projects, commit more readily to tasks, and be more productive.

8. Improved Workplace Culture

One of the biggest objectives of workplace managers that prioritize employee happiness is to foster a healthy workplace culture. 

When there is such a culture underlying the efforts and contributions of employers, the workplace runs as a single unit. As a result, they can meet the goals of the organization more efficiently.

So, progressive managers promote employee happiness knowing that this would help them build a workplace environment that is cordial and stimulates healthy employee engagement. Ultimately, the more attuned employees are to a positive workplace culture, the more managers can rely on them for organizational productivity.

9. Lower Turnover

Employee satisfaction is the main link between employee happiness in a workplace and the turnover recorded over a period of time. 

The relationship is antithetical: the higher the level of employee happiness in an organization, the lower the odds that an employee would leave the organization, and vice versa.

According to Gallup, engaged workers are almost 44% more likely to stay with their current employers.

This dynamic results from employees being satisfied and happy with their work. 

Thus, employees that are not satisfied with their work or feel undervalued will seek employment elsewhere. These dissatisfied employees are generally unhappy and are responsible for turnovers in organizations. 

So, provided that employee happiness is prioritized in the workplace, the rate of hiring and firing employees will be low.

10.  Happier Employees Are Easier to Manage

Agreeableness is one of the foremost indications of employee happiness. Focused team managers tend to work more efficiently with engaged and satisfied workers. 

These employees are easier to explain things to, give instructions, supervise, and ultimately expect first-rate results from.

So, in a workplace where employee happiness is prioritized and promoted, managers have an easy time delegating tasks, implementing strategies, and ensuring healthy employee productivity.

How to Increase Employee Happiness

No doubt, making your employees happy is one of the most effective ways to boost workplace productivity. Beyond productivity, employee happiness also means lower turnover and attrition, which in turn reduces the cost of replacing workers.

Below, you’ll find tips on how to make your workers happier and more engaged.

Make Work-Life Balance a Priority and Support Flexible Hours

Many employers are in the habit of putting pressure on employees to work more, expecting them to be available after hours. That leads to an unhealthy work-life balance as they’re absent when they should spend time with family.

And as we’ve established, workers will start looking for work elsewhere if they believe their employers don’t care about them.

But workers who have a great work-life balance will be willing to put in 21% more work, according to the Corporate Executive Board.

So, ensure your workers have a clear boundary between work and life. To do that, create a company policy that frowns on overwork. Workers must leave when their shifts are over.

You should also support flexible work if you can. Allow workers to choose their hours as long as they can execute tasks within deadlines. What’s more, offer paid time off and respect sick leave.

Avoid Micromanagement and Grant Workers More Autonomy

Employee independence makes workers more confident about themselves and boosts the workplace mood. 

Micromanagement, on the other hand, kills trust, poisons the workplace, and reduces employee morale.

According to a study published in the book My Way or the Highway by Harry E Chambers, 36% of surveyed workers said they left their jobs because of micromanagement.

You should resist the urge to boss your employees around and direct their every move. 

Focus more on the results and allow workers to define their work process. This way, they’re more confident that you trust them and that their work matters. 

Create Career Ladders and Opportunity for Growth

If you want to retain workers, keep them happy, and increase their motivation, you have to give them something worth fighting for. 

Most workers will look for work elsewhere if they believe they won’t move forward in their current place of work. And you can’t blame them.

Feeling stationary, without any opportunity to advance and grow doesn’t do well for morale.

On the other hand, employees will be happier and more motivated to work when they believe their organizations provide avenues for growth and progress.

You can create career ladders and growth opportunities by following these tips:

  • Use a Well-Defined and Dynamic Organizational Chart: Show your workers how they can move higher on your company’s food chain when they achieve milestones.Also, make it clear that the chart is subject to change as your business scales.
  • Define Job Positions and Your Expectations: List the key responsibilities for each role and define what makes each worker successful. You can show them performance metrics and the numbers they have to hit to reach specific milestones.
  • Track Productivity: Ensure workers know that their output and performance will be continually tracked and assessed. You should also take this practice seriously to identify workers who are on track and those going off course.
  • Organize Development and Training Programs: With your productivity tracking data, you can discover areas for improvement and provide the necessary training to equip workers with the skills they need for more advanced positions. 

Recognize and Reward Employees

Workplace recognition is one of the biggest drivers of employee happiness and engagement. It’s part of what makes happy employees go above and beyond for their organizations. 

According to Qauntum Workplace’s 2020 Employee Engagement Trends report, workers are 2.7 times more likely to be engaged if they believe their hard work will be recognized and appreciated. 

You’ll be closer to unlocking your employees’ full potentials when you regularly give out authentic recognition and rewards. That’s because workers will begin to believe their work have real impact and their responsibilities matter.

Psychometrics released their Employee Engagement Study of the Canadian Workplace in 2015. According to the report, 58% of the surveyed employees reported that employers could drive significant engagement levels with employee recognition.

So, you should encourage a company culture that promotes recognition and appreciation. Make sure managers and supervisors on different levels find creative ways to appreciate workers.

Also, ensure you only give out praise or rewards when workers genuinely reach important milestones or achieve significant feats.

Prevent Burnout and Promote Employee Well-Being

According to the World Health Organization and International Labor Organization, people who work long hours have a higher risk of heart-related disease. The report also stated that the situation resulted in 745,000 deaths in one year.

Working long hours also hurts business downlines because low and negative energies result in reduced productivity.

So, make sure workers are not taking on more work than they should and logging extra hours.

You should prompt them to use their paid time off for vacation and take sick leave whenever they have health issues. You should also encourage wellness programs such as exercises and meditation.

Additionally, you should consider the following these tips:

  • Offer flexible hours to allow them create comfortable schedules
  • Create reasonable workloads and optimize work schedules
  • Treat workers fairly
  • Provide the right tools to reduce manual work

You can use project management and time tracking solutions to monitor your employees’ working hours and workload. That way, you can identify when workers are handling too much or working extra hours, whether they’re in-office or remote workers.

Organize Team-Building Activities

Team building activities can strengthen the bond between your workers and refine how they communicate and collaborate. It also enhances the ambience in the workplace and improves the mood in the work environment.

These activities include office trivia, games, icebreakers, and workshops. 

You can schedule these sessions from time to time. For example, you can organize baseball, soccer, or football games, allowing workers to compete in teams.

Online multiplayer games are also great team-building activities, especially for remote workers. They allow workers to engage in friendly competition to enhance the social cohesion in the workplace.

Encourage Communication

Another way to improve employee happiness is to get workers to talk to each other.

Communication is not just the foundation for teamwork, but also a great mood enhancer. When team members communicate, there’s less tension and work can flow freely.

So, to encourage communication, engage in team building activities, organize regular meetings, listen to workers, and provide adequate communication tools.

Collect Feedback and Include Workers in the Decision-Making Process

Collecting feedback and resolving issues are actions that show employees that you care. These actions also remove problems that may affect their moods and cause reduced productivity.

You should also include them in important decision-making processes. For example, you can reach out to workers when the organization decides to introduce sweeping policies that will affect work. 

That way, they will feel like an integral part of the company.


Employee happiness is great for everyone. Employers enjoy improved downlines and higher productivity and workers get to maintain a great work-life balance and job satisfaction.

Remember to keep implementing policies that favor your workers and keep them motivated.

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