Impact of Happiness at Work on Employee's Wellbeing

In an interactive webinar, “Why Employee Happiness Matters, and What You Can Do to Build a Better Workplace”, Harvard experts Michael McCarthy and Tessa Misiaszek popped up two incredible questions:

1. If you could eliminate an aspect of your work to make you happier, what would it be?

2. If you could create a new aspect of your work to make you happier, what would it be?

These questions cut straight to the heart of what so many employees ponder but rarely voice—what truly makes a person happy at work? Certainly, hard work and relentless productivity are necessary determinants, but do you think an unhappy person can perform at work?

It's a jarring NO.

Research shows that happy, healthy people are up to 12% more productive at work. Not just that. Happy employees even contribute to a staggering 26% higher revenue per employee. Sounds Amazing, right?

Want to learn more about how happiness in the workplace can impact employee well-being? Let’s dive deeper.

What does Happiness at Work mean?

Before diving into what happiness at work truly means, it’s essential to understand the broader, often elusive, concept of happiness itself. Let’s be clear – genuine happiness isn’t about perpetual positivity or the absence of difficulties. It’s something beyond that.

As Ann Brashares puts it, “Being happy isn't having everything in your life be perfect. Maybe it's about stringing together all the little things.”

Emiliana R. Simon-Thomas and Dacher Keltner, in their course The Foundations of Happiness at Work, describe happiness at work in a similar vein. Their definition focuses on certain specific parameters, such as:

• feeling an overall sense of enjoyment at work
• being able to gracefully handle setbacks
• connecting amicably with colleagues, coworkers, clients, and customers; and
• knowing that one’s work matters to oneself, the organization, and beyond.

Besides, since the whole pandemic fiasco, people’s perspectives on work and life have shifted dramatically. No longer do employees see their jobs merely as a means to pay the bills. They now seek roles that enhance their lives and align with their personal goals and values.

To dive deeper, happiness at work can be viewed through the lens of the PERMA model, developed by positive psychology expert Martin Seligman. The PERMA model encompasses five core elements that contribute to overall well-being:

• Positive Emotions: Experiencing joy, gratitude, and contentment at work.
• Engagement: Being deeply involved and engaged in your work, often experiencing 'flow' where time seems to fly.
• Relationships: Forming meaningful and supportive connections with colleagues.
• Meaning: Finding purpose in your work and understanding how it contributes to something larger than yourself.
• Achievement: Striving for and attaining goals, leading to a sense of accomplishment.

So, by far, you must have gotten a good idea of what happiness at work means. Let’s dive into the next section.

How Happy Workplaces Impact Employee Well-being?

Let us now understand why happiness matters so much? What are its impacts? Below are some of the research-backed reasons that might help you re-assess your workplace metrics:

1. Reduces Stress

Workplace stress is one of the biggest sources of frustration and burnout for employees. People don’t come to work just to sit in their cubicles and check off tasks. Human beings need more than that to function well.

They need connection, purpose, and a sense of belonging. This is where a happy workplace can be a true blessing. When people feel safe expressing their concerns and challenges, stress doesn’t build up—it gets managed in healthy ways.

Suggested Read: Managing Stress: Insights from Mental Health Experts

Research indicates that happier employees experience lower levels of stress and anxiety. In fact, happy employees demonstrate better-coping abilities when faced with stressors. Source

2. Improves Physical and Mental Health

"Health is wealth," as the old saying goes, but in today’s relentless 9-to-5 hustle culture, our health often takes a backseat. The demands of work can stretch us thin, leaving little room for self-care. And when you add a toxic workplace into the mix, the situation can become even bleaker.

This is why happiness in the workplace becomes so important. It plays a crucial role in influencing people’s mental and physical health.

"Happiness is the highest form of health. - Dalai Lama"

A study shows that happier employees are up to 32% less likely to experience burnout compared to their less happy counterparts.

Another study proves that happier people tend to have lower heart rates, blood pressure, and healthier variability. This reduced risk of heart disease is a significant benefit of a happy workplace.

It's a win-win, isn’t it?

3. Fosters a Sense of Purpose

A key component of happiness at work is having a clear sense of purpose. When people know that what they do matters, it fuels their long-term happiness. They feel motivated to give their best, not just for the sake of getting things done, but because they believe in the impact they’re making.

Approximately 60% of employees feel that being able to do what they do best in their job is very important. It’s this sense of purpose that turns routine tasks into something more fulfilling. This helps transform everyday work into a source of pride and satisfaction.

People often need to ask themselves, “What’s the impact I am creating?” If the answer is positive, it says a lot about the organizational culture. In fact, according to stats, more than salary, Gen Z is really connected to their purpose.

Arthur C. Brooks, in his book The Science of Happiness, poses three thought-provoking questions that invite us to reflect deeply on our lives:

1. Do I experience true enjoyment, or am I merely chasing fleeting pleasures?
2. Am I focused on managing my wants, or am I finding satisfaction in what I already have?
3. And finally, by addressing these two questions, have I found enough meaning in my life?

These questions are designed to guide us toward a more fulfilling and purposeful existence, helping us distinguish between temporary satisfaction and lasting happiness.

4. Increases Productivity

It’s evident that a happy workplace breeds productivity. When employees feel good about where they work, it reflects in everything they do. This happiness can stem from various sources—an encouraging boss, supportive colleagues, or a culture that values autonomy over micromanagement.

A study conducted by the University of Oxford found that happy workers are 13% more productive. In such a workplace, productivity isn’t forced—it’s a natural outcome of the positive energy that flows through the team.

5. Uplifts Creativity

A wealth of research has examined the impact of mood on creative output. And the results are overwhelmingly clear: Being happy is good for our creativity. A study by the University of Oxford found that happy employees are 13% more productive.

When employees feel good, they are more open to sharing ideas and collaborating. This, in turn, can lead to innovative solutions.

According to Mihaly Csikszentmihalyi, creativity is a central source of meaning in our lives. Whether it was innately ingrained deep within us at birth or not, it is essential to our wellbeing.

6. Improves Customer Satisfaction

We all understand that customers are at the heart of every business's success. Employees who are content in their roles are more likely to provide excellent service, leading to higher customer satisfaction and loyalty.

According to a study by Aberdeen Group, companies with employee engagement programs saw a 233% increase in customer loyalty. This loyalty is often a direct result of the positive experiences customers have with engaged and happy employees.

Similarly, a Glassdoor study revealed that for every 1-star improvement in an employer’s rating, customer satisfaction increased by 1.3 stars.

Companies with formal employee engagement programs are indeed enjoying the fruits of their labor in fostering an environment where employees are motivated to satisfy clients
– Aberdeen Group

7. Boosts Employee Retention

Happy employees are less likely to leave their jobs, which reduces the stress associated with high turnover rates for both employees and management. This stability contributes to a more positive work environment overall.

Research indicates that dissatisfied employees are four times more likely to leave their jobs than satisfied employees. Retaining happy employees reduces recruitment costs and maintains a stable, experienced workforce.

Happy Employees are Key to Business Success

There’s an undeniable link between employee happiness and a company’s success, and the numbers back it up. Time and time again, research has shown that happy employees are the backbone of thriving businesses. The evidence is compelling:

Gallup’s research found that companies with highly engaged employees see a 21% increase in profits. That’s not just a slight uptick; it’s a significant leap that can make all the difference in a competitive market.

Harvard Business Review echoes this sentiment, highlighting that companies with happy employees outperform their competitors by 20%. It shows that when employees are happy, they’re more productive and committed to their work.

This data underscores the financial benefits of fostering a happy workplace.

For any business concerned about profitability, these statistics should serve as a wake-up call. The correlation is clear: when you invest in your employees’ happiness, you’re investing in the success of your business.

How to Create a Happy Workplace?

Creating a happy workplace requires intentional effort from leadership and a commitment to building a positive organizational culture. Here are some strategies to foster happiness at work:

1. Cultivate a Psychologically Safe Environment

A psychologically safe workplace encourages open communication and trust among employees. When people feel safe to voice their opinions and ideas without judgment, it leads to better collaboration and problem-solving. Research shows that teams with high psychological safety are 1.9 times more effective than those without.

A key aspect is treating your employees with respect for what they know and never chastising them for what they don't know. If you view your employees with respect for their potential, things get easier at the workplace.

Barbara Frederickson, a researcher of Positive Psychology, has an excellent tip for managers and leaders to foster happiness at work. How, you ask?

She says -

Barbara found that starting a meeting or a day by focusing on gratitude can set a positive tone. Her research shows that expressing gratitude helps boosts your mood and physically expands your peripheral vision. This means when you're in a happy frame of mind, you see more, which enhances creativity and innovation.

Suggested Read: 5 Psychological Safety Exercises You Can Implement At Work

2. Offer Flexibility

Whenever we talk about progress, the word "flexibility" inevitably comes up. As the world evolves, so must our approaches, especially in the workplace.

The pandemic fundamentally changed how we view the traditional 9-to-5 grind. Employees are no longer enamored with the idea of being tethered to an office six days a week. Instead, they crave a more fluid existence where they can work remotely and focus deeply on their tasks.

Paul McDonald, senior executive director at management consulting firm Robert Half, puts it succinctly: “The job market has changed, and workers appreciate choice and flexibility more than employers realize. While salary is still top-of-mind for workers, it’s certainly not the only thing that matters.”

A 2023 International Labor Organization report found that offering greater flexibility—whether through staggered start times, shift-sharing, or remote work options—leads to increased productivity and better work-life balance.

The principle of trust is key to making flexibility work. At LinkedIn’s Silicon Valley office, the entire office setup is designed for hybrid workers. They believe that as long as the work gets done, it doesn’t matter where the employees are working from. It’s a thoughtful move.

3. Integrate Kindness and Empathy

Expressing genuine concern and care is one of the cornerstones of ensuring the happiness of employees. As leaders, you are supposed to connect to individuals on a deeper level. Asking a genuine ‘how are you?’ could be a starter.

In situations where employees’ performance drop, having a one-on-one would offer them a ray of hope. You could say something like, "I’ve noticed you don’t seem as engaged as you were a few months ago. Is there something going on? How can I help? What do you need from me to get back on track? What can we do together to make this better?"

Maintain strong eye contact, practice active listening, and consider using 360-degree feedback.

Encourage small acts of kindness, such as recognizing employees’ efforts, offering help during busy times, or simply being courteous. Kindness builds stronger relationships and a healthier work environment.

According to Ernst & Young, the top five qualities employees seek in an empathetic senior leader are:

• openness and transparency (41%),
• fairness (37%),
• following through on actions (37%),
• encouragement towards others in voicing their opinions (36%), and
• trustworthiness in handling difficult conversations (34%).

4. Invest in Employee Growth

As we are advancing with age, the criteria for assessing workplaces are changing. GenZ employees don’t seek stagnancy or comfort. They are rather always looking for opportunities for growth. They, in fact, seek to move cross-functionally towards organizations. Because , why not? You only Live Once (Y.O.L.O).

These are the areas where you can invest your resources:

Training and Development

Provide opportunities for employees to learn new skills, attend workshops, or pursue professional development. Continuous learning contributes to job satisfaction.

Career Advancement

Offer clear career paths and opportunities for advancement within the company. Employees who see a future with the organization are more likely to stay and thrive.

Meaningful Work

Assign tasks that are challenging yet achievable, and provide opportunities for employees to see the impact of their work. Meaningful work fosters a sense of purpose and fulfillment.

5. Give Your Employees a Sense of Purpose

Karl Marx and Friedrich Engels once wrote that workers were seen merely as tools of production, reduced to being an “appendage of the machine”. Avoid that.

Employees are human beings with lives and challenges that extend far beyond their work. It’s essential to recognize this and ensure that the work they do is infused with purpose. Purpose provides direction and meaning.

"Happiness comes from progress. Progress shows up in the form of growth and in a sense of contribution. -Tony Robbins"

Here’s what you can do:

• Regularly share the organization’s vision, mission, and goals with employees.
• Embed purpose into the company culture. Make it a central theme in all aspects of the business—from recruitment and onboarding to celebrations and day-to-day operations.
  A culture of purpose naturally encourages employees to find meaning in their work.
• Encourage employees to reflect on their personal values and how these can be aligned with their work. When employees feel that their personal values are in sync with the company’s mission, work gets more meaningful.

6. Foster Belongingness and Inclusivity

Belongingness and inclusivity are vital for fostering workplace happiness .
An average person will spend 90,000 hours at work over their lifetime, So, its important to ensure those hours are spent in a positive, supportive environment. Without happiness, enduring such a significant portion of life can be harmful to one’s well-being.

Jon Clifton, CEO of Gallup, has pointed out a growing crisis of loneliness that has been intensifying even before the pandemic. Alarmingly, 20% of adults worldwide report having no one to turn to in times of need.

This sense of isolation can be particularly challenging in the workplace.

Gallup’s research indicates that having a best friend at work has a profound impact on key outcomes, including an employee’s likelihood to recommend their workplace, their intent to stay, and their overall satisfaction.

The 2023 Global Culture Study by O.C. Tanner echoes these findings, showing that organizations that score high on the Community Index—where employees feel a strong sense of belonging and meaningful contribution—experience a 62% increase in employee-estimated tenure.

However, belongingness extends beyond just friendships. It’s about cultivating an inclusive environment where everyone, regardless of culture, gender, race, or ethnicity, feels welcomed and valued.

Breaking down barriers and fostering unity among diverse teams is crucial. As the saying goes, “United we stand, divided we fall.” Let's try to live by that.

Here are a few things you can ensure:

• Implement Inclusive Policies and Promote diversity of all kinds
• Encourage social wellness activities and events that promote social wellness. A workplace where employees enjoy each other’s company is a happy one.
• Build a culture where employees feel valued, respected, and recognized. Acknowledging achievements, both big and small, fosters a sense of belonging and motivation.

7. Practice Positive Leadership

Happiness at work always starts from the top. It is always desired when both the ‘heartset’ and the ‘mindset’ of the leaders exude positivity. Superficial things don’t really work here.

To truly imbibe in the spirit of healthy positivity, try to have a very good approach towards your employees. If they commit certain errors, teach them that ‘to err is human”. If they get afraid of committing errors, its going to stifle productivity. You should rather instill a culture that celebrates failures and learns from them.

Follow the H.O.T communication strategy. Honest, Open and Transparent.

Moreover, if your employees pitch in certain ideas, acknowledge them and try to incorporate those ideas. This way, you make them feel important and this contributes immensely to the happiness factor.

Be the kind of leader who they don’t mind following.

Suggested Read: Wellness Leadership: Strategies for a Healthier, Happier Workplace

8. Prioritize Employee Wellbeing with an Employee Wellness Program

Ah! This is a very crucial aspect of ensuring happiness at work. Employee Wellbeing plays a prominent role in determining the nature of a workplace. When employees feel that their health—both physical and mental—is supported, they are more likely to be engaged, motivated, and satisfied with their jobs.

Follow these ways:

• Have a healthy work environment. Ensure that the physical workspace is clean, comfortable, and conducive to productivity.
• Offer resources or programs that encourage healthy habits. This could include stress management workshops, on-site fitness classes such as yoga, or wellness challenges.
• Invest in comprehensive wellness programs that address holistic well-being concerns. These programs demonstrate that the company values its employees’ health and happiness.

Elevate Employee Happiness with Our Unique Corporate Wellness Program - Vantage Fit

At Vantage Fit, we understand the critical role that employee happiness plays in organizational success. Our corporate wellness program is designed to promote holistic well-being, addressing the physical, mental, and emotional health of your employees. With Vantage Fit, you can:

• Boost Employee Engagement: Our wellness challenges and activities keep employees motivated and engaged, fostering a sense of community and competition.
• Improve Physical Health: Through our fitness programs, we encourage employees to stay active. This leads to better physical health and saves healthcare costs.
• Enhance Mental Well-being: Our mindfulness and stress management resources help employees manage the pressures of work.
• Track Progress: With Vantage Fit’s tracking features, employees can monitor their progress, set goals, and celebrate achievements

They can also win incentives for completing activities. This lets them shop from various sites.

By investing in your employees’ well-being with Vantage Fit, you are not only fostering workplace happiness but also driving your organization toward greater success.

Bottom Line

Happiness is less about external circumstances and more about what we can control internally. Many people can manage their finances, but when it comes to managing emotions, it’s a different challenge altogether.

The affairs of the heart are complex, and understanding the science behind human emotions is crucial.

This is where you, as employers, have a significant role to play.

Ensuring that your employees feel supported, valued, and cared for can make all the difference. As you take the insights from this blog, consider how you can implement them to create a more positive and fulfilling work environment.

When you prioritize your employees’ well-being, the benefits will not only reflect in their happiness but also in the overall success of your organization.

We, at Vantage Fit, can help you improve the happiness metrics drastically. Why not join hands with us?

Click here to schedule a demo and secure ‘happitude’ at your workplace.