The Role of Employee Happiness in Talent Management

Intuitively most managers and HR professionals think that happy employees are more productive. But what does it take for employees to be happy in their jobs and in their personal lives? And how does that happiness translate into improved job performance? The booming area of happiness research provides answers, along with practical tips for improving talent management.

Economics used to be called "the dismal science." But lately economists have discovered the importance of happiness, defined as subjective well-being. The World Economic Forum, a global economic think-tank, argues: "We should all care about well-being because it helps produce other good things that we care about—happier workers generate better performance for companies; happier people have more successful families and create more harmonious communities." In other words, happy employees are essential for sustainable business success and future economic prosperity.

Here's why.

Researchers at the University of Michigan's Center for Positive Organizational Scholarship describe happy employees as "thriving." In a thriving workforce, employees actively create the company's future—and their own careers. Employees thrive in jobs that give them a sense of purpose and room to develop their potential. Successful companies such as Costco, Quik-Trips, and Trader Joe's understand that low costs, excellent customer satisfaction and strong financial performance depend on positive employee work experiences—in other words, happiness.

When collective well-being in a company's workforce is high, so is productivity, loyalty and employee health. This is called the "Google effect" because the high-tech company's efforts to cultivate workforce happiness improve productivity and are crucial for generating innovative ideas.

Well-being is positively contagious. According to Gallup researchers, the overall well-being of each work team member can enhance, or reduce, their fellow team members' sense of well-being. Supervisors have a big influence in this regard. Employees whose supervisors are 'thriving' are themselves more likely to thrive in the future.

The quality of a person's job influences their overall quality of life. In Redesigning Work, my book with Frank Graves, we document that three out of four Canadian workers who are satisfied with their lives (a standard measure of "happiness") also are satisfied and motivated when it comes to their job. Furthermore, workers with high life satisfaction are far more likely than their peers who report low life satisfaction to experience manageable levels of work stress and good work-life balance—two key job quality indicators.

Well-being also is directly linked to crucial talent management goals. As Redesigning Work reports, those same employees who are happy with their lives also are far more likely than their less happy peers to take initiative in their job, fully contribute their capabilities and learn new ways to do their job better.

HR professionals must reach beyond engagement when setting strategic HR goals. As psychologist Martin Seligman suggests, the goal should be to enable people to "flourish." Work engagement is an important enabler of well-being for both employees and organizations. Engaged workers perform their jobs better than their disengaged co-workers because they experience positive emotions at work, are healthier, actively create their own job resources and contribute to thriving work teams.

For talent management, the practical implication is that cultivating the capabilities of each and every employee also requires a comprehensive focus on their well-being. Consider the following ways to simultaneously improve employee well-being, talent management and organizational performance:

Photo: Creative Commons