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How Can Happiness Affect Company Strategy?

Employee satisfaction should underpin corporate strategy; the benefits are numerous

31Mar

In 2014, it was revealed that Amazon had been offering its warehouse employees $5000 if they decided to leave the company. By voluntarily withdrawing their labor, workers could earn what would equate to around two months’ wages. It seems farcical at first glance, but such generous severance packages are not limited to Amazon - Netflix have trialled a similar system. It all comes down to one simple fact of business: an unhappy employee is a less effective employee.

Employee satisfaction and company strategy are all too often treated as somehow separate, a soft bonus on a concrete necessity. But, as the potential benefits become increasingly apparent, a shift is taking place toward an emphasis on wellbeing and happiness in the world place. Amazon’s deal - which had the provocative headline ‘Please don’t take this offer’ - highlights the negative impact an unhappy employee can have on a company and the willingness of companies to detect and part with those disengaged with their work. Amazon adopted the strategy from shoe and clothing retailer Zappos.com who, after four weeks of intensive initial customer service training and a week on the job, put forward ‘The Offer’ - a full week’s salary plus $2000. 97% opted to stay, and the 3% who didn’t find the job to their liking left comfortably compensated.

What the strategy reveals, above all else, is that major companies are beginning to properly realize the importance of maintaining morale and wellbeing among the workforce - Amazon’s relationship with its warehouse employees was fractious at best. And the benefits to mending that broken relationship are numerous; employee satisfaction isn’t separate to business strategy, it is one.

Put simply, a happier employee works more effectively, for a number of reasons. They sleep better, they are less stressed and they are less inclined to leave the job. The three symptoms are intrinsically linked, of course, but each presents its own problems to a company. Poor sleeping habits see workers lose far more days to illness - the US loses 150 million workdays every year to the common cold, for example. A 2011 survey of 7,400 workers found that 23% reported insomnia, of which many reported greater ‘presenteeism’ - attending work but putting in a greatly reduced performance. Presenteeism, just as absenteeism, causes profit losses. About eight work days per individual are estimated to be lost, resulting in reductions of over $63 billion to US companies, according to the Huffington Post.

A lack of sleep and stress go hand in hand, and the latter is a major cause of paid absences among US workers, estimated to be around 12%. Stress is, to a certain extent, a fact of life, but it can be damaging to both a worker’s physical and mental wellbeing short-term and long-term, which negatively affects performance. A Monster.com survey found that 42% of American respondents had previously left a job due to stress. Workers leave jobs for a myriad of reasons, but limiting instances of turnover as a result of stress of dissatisfaction should be a priority for any business looking to dramatically improve their productivity. A high turnover of staff can negatively affect efficiency, number of errors and customer satisfaction, on top of the fact that persistent hiring can be an expensive process.

The matter perhaps relates more to corporate culture than strategy. Employee satisfaction should be woven into the infrastructure of the company; in an office environment, this means in-house changes. Flexibility regarding working hours, for example, can greatly reduce stress and aid healthy sleeping habits. An open office that encourages collaboration may have been found to reduce productivity, but will improve happiness enough to offset the lack of total focus. A one-size-fits all approach to office design is outdated, too. Instead, ensure that each team has the facilities they feel they need to perform their job - a revealing study by office supplier Steelcase found that 84% of workers reported that their environment did not allow them to fulfil their role to their potential, to collaborate with ease, to concentrate effectively or to choose where to work task-to-task. Providing multiple communal areas is one way to give workers the choice to remove long group discussions out of the bullpen and into a more versatile space.

More data is on the way, too. The concept of ROI is being manipulated in the Return on Values Project, a $1 million research project which aims to quantify the relationship between corporate culture and profits in small to mid-size businesses. The findings will, to some degree, reflect the notion that the happier an employee is, the more productive they are. For a less stressed, better rested, more present and more sociable workforce, ensure that employee happiness is by no means an afterthought; it should be a fundamental tenet of corporate strategy.

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