It’s not tangible is it, happiness? How do you prove it? What if your job is to make people happy, deliver results, make a profit? It’s different things to different people, it’s so hard to define, how can you possibly meet everyone’s needs? You probably even avoid thinking about it. However times are changing and tangible evidence is starting to appear, when people are happy they have a positive effect on a companies profits.

In David Maister’s book ‘Practice What You Preach’ you will find the first attempt to use hard data to prove the link between employee satisfaction and performance.

He conducted a study of the correlation between employee attitudes and financial performance, involving 139 professional service firms covering 5,500 people in 15 countries. He discovered that financial performance – evaluated by margins, profit per employee and profit growth over a two year period, is absolutely linked to employee satisfaction. He refers to this as Generalised Investments (GI).

Charles Galunic and John Weeks at INSEAD have also found similar results, suggesting that when companies undertake GI, like personal development, leadership programmes etc, then employee commitment and loyalty can be increased, producing greater satisfaction and profitability.

GI and commitment is further strengthened by Linda Bilmes and her book ‘The People Factor’. In here she identifies ‘people factor’ criteria and the ones which are most likely to increase satisfaction. These are allowing people to influence decisions that affect their working lives, training and performance linked pay. Using a study of 2,000 American and German companies, overall the levels of satisfaction were 34% for the American workers and 35% for the Germans. However, in comparison, among the workers in companies that offered the people-factor criteria, job satisfaction was much higher at 58% for the Americans and 63% for the Germans. Interestingly, she found a big divide though, in what these companies thought they provided and what workers believed they actually received. For example, 71% of respondents listed ‘I am able to influence decisions that affect me’ as ‘very important’ but only 34% of employees agreed they could do it.

So how do you measure happiness and how do you link happiness and profit made by a business?

There have been a number of attempt this. For example the American department store Sears, have proven that for every 5% increase in employee motivation, the company profits push up by half a percentage point. A study by Towers Perrin, Now known as Towers Watson, a HR and Financial Services consultancy, proved that a lower employee turnover rate helps a company keep customers and by increasing employee retention by 2% increases business by as much as 6%.

So if we now have some proof that happiness equals increased productivity and profit, exactly what is happiness?

First lets explore what we mean by happiness as it plays such a large part in our lives and work and is often misunderstood. We use words like happiness, pleasure, fun, laughter, enjoyment, satisfaction, and excitement as if they are interchangeable.

We use each or any of them to create a general image of people having a good time; implying they all mean about the same. However, happiness is quite different. Fun, pleasure, satisfaction and excitement all turn on and off but happiness does not, it stays with us regardless of the emotion being experienced. Happiness is a condition of my being – it stays with me while I am experiencing emotions.

The Benefits of happiness

When you have greater control of your happiness:

* You feel good. You feel joy, cheer, peace and contentment

* You are pleased with who you are and what you do

* People enjoy being around you

* You have higher self esteem

* Your life is improved physically

* You can more easily solve any problems that may arise

* You have additional energy

* Your life is improved in every way

* You will have the best life imaginable – a happy one!

On the other hand, despair or unhappiness:

* Makes you feel anger, loneliness and resentment

* Stops you from solving your problems

* Often creates new problems

* Limits friendships with other people

* Has no positive benefits

* Will eventually destroy your life

For organisations, it appears that staff are more productive when they feel they are in greater control of their lives and when the company is investing in their development.

The happiness that results leads to greater self leadership, self confidence, self responsibility which in turn result in:

* less blaming,

* less stress,

* better internal relationships,

* increased creativity,

* greater trust,

* greater confidence and maturity in dealing with customers.

The Conspiracies of Happiness Often we collude to maintain many conspiracies about happiness that have us believe that happiness comes from outside of us. We are promised instant happiness for simply buying the right toothpaste or drinking the right beer. We know from our own experience that more material things do not bring us happiness. We remember how quickly the ‘happiness’ of a new job, pay rise, new house or car, international holiday etc wears off. Often leaving us feeling empty and needing something ‘bigger and better’.

Here are some common happiness conspiracies:

* If only I had more money I’d be happy

* If only I was more famous I’d be happy

* If only I could find the right person to marry I’d be happy

* If only I had more friends I’d be happy

* If only I wasn’t physically disabled I’d be happy

* If only someone close to me hadn’t died I’d be happy

* If only the world was a better place, then I’d be happy

Definitions of Happiness

We would say we are in a state of happiness when our mind is at peace. Importantly, happiness comes from the inside out and not the outside in. The modern world needs to measure everything and a mind at peace is a difficult challenge for researchers to deal with. The closest they have come in measuring it is Life Satisfaction or the extent to which I am satisfied with my life.

A great deal of interest and research is going into this area. For example the Strategy Unit of the Cabinet Office has produced a report titled “Life Satisfaction: the state of knowledge and implications for government” However, as the underlying belief is that happiness comes from outside of us, research into Life Satisfaction looks into issues such as health, employment, income etc as measures of satisfaction. While this might be valid, it is not happiness in the sense that we understand it because life satisfaction comes from outside of us, not inside.

Taking Control of Happiness

If we accept that happiness comes from the inside out, then it is possible for us to take control of our happiness. Learning to take control of our happiness is an immensely valuable capability for a person and at the same time, as we have seen, can result in great benefits for the organisation. Imagine how the performance of you organisation would improve if more of your staff were taking control of their happiness; were more self-confident, self-leading and self-responsible.

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