Wanna Make More Money? Make Your Employees Happy

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Wouldn’t it be great if you could wave your magic wand and abracadabra, up go sales and profits? If you flunked advanced wizardry, don’t worry. Believe it or not, this is a trick for mere mortals. All you have to do is make your employees happy.

Happy Workers Perform

In a Gallup, Inc. study of over two thousand business units on “the causal impact of employee work perceptions on the bottom line of organizations,” researchers found a distinct link between employee attitudes and a company’s financial performance, employee retention, and customer loyalty.

Research conducted by the Wharton School found that Fortune’s “100 Best Companies to Work For in America” reported 3.5 percent higher returns than their peers (Harvard Business Review Daily Stat).

Of course there’s the chicken and the egg question. Is company performance better because its employees are more engaged or is it the other way around? According to the Gallup study, the answer is clearly the former—happy employees are productive employees.

But Most Employees Aren’t Happy

Unfortunately, for the majority of businesses, employee engagement—a strong indicator of satisfaction and morale—is in the toilet.

According to a study by Mercer, a global HR consulting firm, nearly a third (32 percent) of US workers are seriously considering looking for a new job (up from 23 percent in 2005). Another one in five (21 percent) don’t have plans to leave but also don’t give a rat’s buttocks about what they’re doing—just the kind of people you want on the payroll. (Mercer’s What’s Working survey)

Similarly, Blessing White, a global consulting firm that focuses on employee engagement, found that only a third of US employees are fully engaged. Their research, and that of other industry experts, shows that the most engaged employees are both highly satisfied and high contributors to the organization.

In their 2011 Global Engagement Report, they summarize the level of engagement of North American employees as follows:

• Highly engaged: 33 percent of North American employees;
• Almost engaged: 10 percent—high performers and reasonably satisfied but not consistent;
• Honeymooners and hamsters: 24 percent—either new to the organization in a kind of limbo or “working hard but, in effect, spinning their wheels;”
• Crash & Burners: 15 percent—“disillusioned and potentially exhausted;”
• Disengaged: 18 percent—not contributing very much and not very satisfied; likely skeptical and may spread their negativity around the organization.

Millennials were the least engaged (only 23 percent were highly engaged and 25 percent were disengaged). Boomers were the opposite (36 percent were highly engaged and 16 percent were disengaged).

Looking at the numbers by department or function, employees in sales showed the highest engagement (38 percent in Blessing White’s highest engagement category) and IT and R&D workers showed the lowest (26 percent). Worse, 27 percent in engineering and 22 percent in IT were categorized as disengaged. Think about that next time you walk into a smart building.

So how do you make your employees happy?

Based on the answers to Blessing White’s question “which one thing would improve job satisfaction.” it was clear that employees simply want to do what they do best. Career development and flexible working conditions were also high on their radar.

• Opportunity to apply their talents 27 percent
• Career development and training: 20 percent
• More flexible working conditions: 15 percent

From their managers, the report showed employees want:

• A sense of belonging; feeling like they’re part of a team;
• Regular feedback on performance;
• Recognition for achievements;
• Encouragement for them to use their talents;
• To be treated like an individual;
• To be asked for their input (and have it acted on);
• To not be micromanaged.

Employees want their organization’s top leaders to:

• Create an environment that drives high performance;
• Communicate honestly;
• Act in alignment with the company’s core values and guiding principles;
• Link the work of the company to a larger purpose.

The Blessing White report observes, “Engaged employees . . . stay for what they give (they like their work and are able to contribute); Disengaged employees stay for what they get (a secure job in an unfavorable employment market, a desirable salary or bonus, favorable job conditions, or career advancement).”

Which kind of person would you rather have on your team, or for that matter, spend the majority of your day with: a giver or a taker?