Understanding employee happiness in the workplace

Gallup’s 2023 State of the Global Workplace report found that quiet quitting—or psychological disengagement by workers just going through the motions—contributed to losses of $8.8 trillion in the global economy. According to the report, 60% of employees fit into this category, indicating that happier, more engaged workers contribute a lot to even the most successful workplaces.

The same report found a record-high employee engagement rate in 2022, which bolsters the assumption that happier employees demonstrate more effectiveness at their jobs than their unhappy counterparts. The study found that 23% of employees feel connected to their workplace and find their work meaningful—two major prerequisites for happy employees. The challenge then becomes how to make employees happy to maximize their contributions.

The benefits of happier employees

Consider how employee happiness benefits your organization as a whole and how to foster contentment for your team. Let’s explore why your organization wants to make and keep happy employees.

They feel more empowered to make decisions

Happy employees feel empowered by their employers—not micromanaged and controlled. They feel prepared for their responsibilities and trusted to make the correct decisions for their particular roles. When employees can do their jobs without consulting multiple levels of management or enduring lengthy approval processes, they might complete tasks and projects quickly while maintaining consistent quality.

They’re more enthusiastic about their work

Happier employees have more motivation to come to work and perform their duties enthusiastically. Because they find joy in their jobs, they often want to make a good impression and stay with the company long-term. Additionally, because happy employees usually experience less stress, they often feel more connected to your company and have less likelihood of burnout— both of which factor into your business’s productivity.

They have less absenteeism and better health

Lower stress levels generally make happy employees healthier—both mentally and physically—so they typically take fewer sick days. When workers enjoy their jobs, they are more motivated to be on time and present, potentially decreasing instances of absenteeism.

They communicate better with coworkers and management

When employees feel comfortable and confident at work, they typically create better working relationships with their colleagues and managers. Often, employees who frequently communicate with colleagues operate more efficiently, ask more questions and share information that may help foster enhanced productivity. 

They provide an improved customer experience

When your business prioritizes employee happiness, your commitment usually shows in the positive, professional attitudes of your workers. Public-facing staff who regularly interact with current and potential customers especially benefit from a company culture that focuses on making happy employees. This helps ensure employees get the training and support they need to consistently provide exceptional service.

They’re more creative and innovative

Creativity has the proven effect of making you happier, but being happy can also promote creativity. Free minds and happy moods often make employees more receptive to new ideas and alternative ways of thinking. This positive cycle, in turn, may ultimately boost productivity by providing a setting that encourages them to share creative ideas during discussions and find innovative solutions.

They care more about your business

Happier employees enjoy working for your company, which means it’s in their best interests to strive for its success. Because they’re already content with their current roles, they may feel more loyal to your company, making them less likely to leave. This benefits employers by reducing costs associated with turnover, decreasing risks of losing institutional knowledge and improving coworker morale.

They boost your company’s reputation

When you make employees happy, they may tell their professional network or even refer them for open positions. Likewise, many customers prefer doing business with organizations well-known for employee happiness, potentially helping you grow your company.

How to make employees happy

Creating happier employees depends a lot on understanding what workers want and what you as the employer are reasonably able to provide. Use these general guidelines when you want to know how to make employees happy.

Compensate employees fairly

Paying employees an amount that reflects their skills and experience shows employees you value them and enhances their happiness levels. When you’re setting pay, always consider average salaries for each position and strive for competitiveness. Likewise, increase pay to reflect the added value when employees grow their skills and take on additional responsibilities within their teams and departments.

Recognize employee contributions

Taking the time to let employees know how much you appreciate their performance enhances their confidence in their abilities. This recognition typically shows up in positive habits, such as fast turnaround times on assignments and a willingness to collaborate when coworkers need a helping hand.

Give employees the tools to succeed

Providing reliable technology, a comfortable work environment and effective employee training and development prepares your workforce for success. Ensure workers have up-to-date software and access to the technical support they need to resolve problems quickly to reduce wasted time and stress. When employees have the right tools, they’re more likely to maintain a positive attitude, remain confident in their work quality and feel satisfied and supported.

Reward top performers

Show your appreciation when employees do more than expected, such as delivering an important project well before the deadline, earning exceptionally positive customer reviews or exceeding their sales quotas. Monetary rewards, such as bonuses, provide incentives for employees to strive for excellence, but so do many common company perks, including flexible scheduling and extra vacation time.

Promote a healthy work-life balance

Employees have lives outside the workplace, and it’s important to recognize this as an employer. Help employees find a happy work-life balance by providing ample opportunities for their success at work that don’t involve sacrificing their personal lives. For example, you might offer flexible working hours, remote work opportunities, and paid time off (PTO) that enable your team to have fulfilling lives outside the office.

Provide constructive feedback

When employees know they’re doing well, they’re more likely to feel confident about their performance—which can lead to a happier, more productive workforce. Encourage employee satisfaction by setting up a process for consistent feedback and employee evaluation. Ensure all managers regularly meet with employees who report to them to discuss their performance and provide helpful advice for improvement.

Create a friendly company culture

Make sure employees feel safe, supported and valued by fostering a communicative company culture. To do this, first, assess your company culture to find areas for opportunity and improvement. Foster a feedback system that enables open communication between employees and leadership. A supportive setting like this makes workers feel welcomed and included, with happier employees as a result.

Building a happy workforce takes time and effort, and you can’t expect employees’ attitudes to shift overnight. By committing to activities that make workers feel more satisfied with your company and their jobs, however, you can help your organization thrive—powered by productive, happy employees.

FAQs about workplace happiness and productivity

Are companies with happier employees more successful?

A company culture that prioritizes employee happiness often results in more successful outcomes for your business. Satisfied employees feel valued, making them greater assets to your company. Higher rates of employee happiness result in better employee retention, lower rates of absenteeism in the workplace and increased productivity.

How can I measure employee happiness?

Actively measure your staff’s happiness and satisfaction by using key performance indicators. For example, you might send out an employee satisfaction survey that lets staff provide feedback in a safe setting. Annual or quarterly one-on-one meetings with team members offer opportunities to ask for feedback and note suggestions to improve company policies and practices. Other indicators to look at include employee performance, workplace relationships and attendance records.

What questions should companies include on employee satisfaction surveys?

When you want to gauge employee happiness, adding questions relating to key performance indicators (KPIs) provides added insight into how to keep employees happy. Include these questions when you want to know what your company does right and what it doesn’t in terms of employee satisfaction:

• How well does management communicate with staff?
• How much confidence do you have in management’s competency?
• Do you trust management to do the correct thing?
• Do you receive the support and encouragement you need?
• Does management ask your opinion during the decision-making process?
• Do you feel safe and motivated at work?
• How satisfied are you with your base pay and bonuses?
• Are there any benefits you’d like that the company doesn’t offer?
• Do you feel like management is fair and impartial to everyone?