Employee Happiness: What You Need To Know

We might be biased, but we think that investing in employee happiness is the best choice you can make for your organisation's people strategy. It's not just an opinion though - we have hard neuroscience to back us up. Without further ado let's dive into the how, what and why of employee happiness before providing 6 useful tips for improving employee happiness.

Employee happiness

More and more organisations are including happiness in their people strategy, if that’s you then this is the resource for you!

1. What Is Employee Happiness?

Often when we think of happiness we think about mood. In the workplace, this is a little simplistic. This is because mood fluctuates, and nobody's happy all the time. In fact, being happy all the time is as much a mental health issue as being sad all the time. 

Instead Employee Happiness is about having the conditions where everyone can survive and thrive. We call this Freedom to be Human. 

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2. Why Is Employee Happiness Important?

Happy employees are 13% more productive. (Oxford University)

Study after study shows that happiness is linked to the bottom line. Not only are happy employees more productive, but organisations with happier employees excel on the stock market even when other factors are controlled for. 

We live in uncertain times. Outside events including the pandemic, war in Ukraine, the cost of living crisis and political instability have been happening faster than ever before. Undoubtedly all of this has had a big impact on our mental health and wellbeing. Happiness is likely to have been impacted, which is detrimental to performance and productivity. . By collecting quantitative and qualitative data on employee happiness, you can ensure you’re getting the most out of your people. 

Of course, it’s not all monetary. Looking after your people is also ethically the right thing to do!

Want to read more about the business case for happiness? Our co-founder, Matt Phelan, has written a whole book on the subject.

3. Why Should You Build Employee Happiness In Your Organisation?

We know that many organisations have employee engagement budgets, but only a select few have happiness budgets. Thankfully, this is changing! We work with organisations around the world who invest heavily in people as much as profits. Particularly in Scandinavian countries we’re seeing more of an emphasis on happiness in the workplace. We love this because it’s so important to build happiness AND engagement in the workplace. 

Let’s dive into why…

Support Mental & Physical Wellbeing - HR teams are always looking for ways to support their employees’ mental and physical health and educating the wider team on the importance of wellbeing. It may seem obvious that supporting your organisation’s happiness will support their mental health. What may be less apparent is that it can also support physical health. When people feel mentally safer, this decreases their production of hormones such as adrenaline and cortisol. Overproduction of these hormones actually has a bigger impact on physical health than you might think!

  1. Create Thriving Cultures - Creating a thriving culture requires your team to be both happy AND engaged. Although engagement gives us direction, it’s happiness that provides the power to actually get there! Creating a thriving culture will support both your team and your organisation by giving everyone the environment they need to succeed!

  2. Increased Retention & Performance - External studies as well as our own internal data and research show that happier teams are more productive and have less turnover. When people feel safe and have positive relationships they’re more likely to stay with your organisation. This will build stability within your team and be the catalyst for a self-sustaining model. 

  3. It’s The Right Thing To Do - Creating a team where everyone feels safe and happy is just the right thing to do. Diversity is a hot topic at the moment, but creating a team where everyone is welcome isn’t just about ticking boxes or making your organisation look good - it’s actually what’s best for your people. We work with enough HR professionals to know that’s most people’s ultimate goal anyway!

We love to see organisations set aside budgets for their employee happiness because we can really see the impact it has on individuals and the organisation as a whole. 

4. What Are The Drivers Of Employee Happiness?

We used a fact-based neuroscience model to understand what makes us happy at work. This model breaks down the drivers of happiness into key themes. 

When we think about happiness in the context of work, we think about 4 different neuroscience themes. These are safety, relationships, acknowledgement and freedom. You can put these into a pyramid similar to Maslow’s hierarchy of needs. To create workplace happiness we first need to feel safe. Then we need meaningful  relationships within the workplace and to feel needed and appreciated. Finally, a sense of freedom is required.

These neuroscience themes feed into two brain types. The happiness brain types are instinctive and emotional. Let’s look at the neuroscience themes in more depth…

  1. Safety - This theme is key because it’s linked to the amygdala. When people don’t feel safe they go into fight or flight mode. This can lead to confrontive behaviours which may result in toxic workplaces. But more commonly and insidiously this can lead to underperformance, as people’s brains are hijacked by their instincts rather than being able to be creative and productive. Your team needs to feel mentally and physically safe. Elements like the work environment, trust and balance all come into play. 

  2. Relationships - Humans are pack animals and so our brains have developed to place particular importance on relationships. It’s impossible for people to feel happy at work if they don’t have positive relationships with their peers, managers and senior leaders. We’ve all known situations where people have left managers, or stuck around because they love their colleagues. This is neuroscience in action!

  3. Acknowledgement - The chemistry of our brains means that when we get positive feedback and recognition, we feel happier. This is caused by a dopamine hit! Although this might be short lived, ensuring that your team feels recognised, listened to and is provided with constructive feedback in the right ways and at the right time is key to a happy workforce. 

  4. Freedom - this is an often overlooked area of workplace happiness. Your people need to feel free to be themselves in order to feel good. This means that they’re able to be authentic and feel accepted. Creating a diverse and inclusive workplace will help support this. It’s also important that people feel they can be autonomous, and not be micromanaged or restricted. Flexibility in the workplace is so important for building happiness. 

As a business leader, it can be easy to get caught up in the bigger picture. But, thinking about whether your people feel safe and appreciated can go a long way to making them feel happier in the workplace. Our own global study into workplace happiness backed this up. It concluded that the number one factor which impacts workplace happiness is “feeling valued and recognised”.

Keen to dive deeper into neuroscience? We’ve got you covered with our in-depth guide to the methodology behind our platform.

5. How to Measure Employee Happiness & What Are The Benefits?

You may not have thought about measuring happiness before. Because it’s so closely related to mood, it might not seem like something that is quantifiable. And although happiness has long been thought as hard to measure, technology has come to the rescue in providing us with qualitative backing.

There are inexpensive tools which can be used when measuring employee happiness and employee engagement. Survey Monkey and Google Forms are popular choices. However, using a third party tool like The Happiness Index brings more accuracy and speeds up the process. Using a third party allows you to bring experts onboard to ensure you get the insight behind the data, which allows you to make actionable change. But that's not to say you shouldn't consider engagement software that integrates with ours to meet your wider HR needs.

Our platform puts the science back into emotions using the neuroscience model explained above. This means that measuring happiness is accurate. 

But what are the benefits?

  1. Understand How Everyone in Your Team Feels - We know many HR professionals don’t have time to check in with everyone in their organisation one-on-one. This means that you might not be aware of how certain members of your team feel, leading to an incomplete picture of sentiment within your organisation. By measuring your whole organisation you will get a more accurate and actionable picture. 

  2. Give Everyone In Your Organisation A Voice - We work with a number of organisations with unionised labour, but the truth is that in the UK and beyond, fewer and fewer people are members of unions. This means that they don’t always feel listened to. By measuring sentiment, you’re giving your team a voice and a hand in your culture and organisational direction. 

  3. Take Action Before There’s a Problem - Organisations aren’t always going to be happy, but if you’re regularly measuring how your team feels you’ll be able to catch unhappiness before it builds into something unmanageable. By staying agile to your team’s needs you’ll be able to catch problems as they arise. 

  4. Base Strategic Decisions on Accurate Data - We’ve already seen the importance of building a happy organisation. The problem is that too many organisations base their strategy on hunches. While sometimes these pan out, it’s best to collect the data before you take action. This means you can be sure that you’re spending your time and resources on programmes and initiatives that are actually going to make a difference to your team - with zero guesswork! 

  5. Celebrate Successes - One of the best things about measuring happiness is that you can see the impact you’re having as an HR team. When you see feedback on particular initiatives you’ve implemented, and the corresponding uplift in sentiment, it really underscores the impact of the work you’re doing. We recommend celebrating these wins with the whole organisation.

Happiness can be tricky to measure. But not for the reasons you might expect. Whatever you may think, happiness is not a “fluffy” metric, and can be measured accurately - as long as you know how! Luckily we’re on hand to help. Our platform measures happiness and engagement across all our surveys. Specifically, our always-on offering, Employee Voice, asks your employees “how happy are you at work?”. This gives you real-time insight into your employee’s happiness. 

To really understand how your team are thinking and feeling, you’ll need to be able to dive into your results with confidence. We’ve created our platform with full anonymity guaranteed. This means that you can be sure that your team is telling you what’s actually happening because they feel safe to do so. 

To ensure that your workplace is happy for everyone on your team, we allow you to slice and dice your data as much as you need. Our reporting dashboards give you full flexibility to dive deep into your results, without a degree in data engineering!

Not a data expert? Not a problem! Check out our free eBook which will take you through the process of understanding your data step by step. 

6. How Can You Improve Employee Happiness?

The important thing to remember when striving to improve happiness for your organisation is that it’s impossible to make everyone happy all of the time! However, there are definitely ways in which you can make an impact on happiness within your organisation. Here are our top tips. 

  1. Measure all Four Drivers of Happiness - To really understand how happy your team are, and how you can improve this, you need to understand how you’re performing in all four areas. Then you can create a roadmap that will drive happiness for your unique team. 

  2. Don’t Make Happiness a Target - This might sound counter productive, but it’s important to remember that no one can be happy all of the time. Trying to achieve a certain level of happiness consistently will only lead to disappointment. Instead see your happiness score as a weather report that might fluctuate, but ultimately you want to see trending in a positive direction. 

  3. Ensure Feedback is Two-Way - Listen to your people, gather context and then share your findings. This will help you collate more accurate data and, in turn, ensure you’re working from an action plan that produces results for your organisation. 

  4. Drive Meaningful Change - You need to talk the talk as well as walk the walk. Make sure you implement actions off the back of your survey results, so everyone can see you’re making happiness a priority. Share roadmaps and update your team on your progress. 

  5. Make Listening Part of Your Culture - Doing a one-off survey won’t help you to create a happier work environment. Instead you need to commit to listening regularly and understanding the impact of the changes you make. Happiness is a journey, not a destination!

  6. Remain Agile - Sometimes the action you’ve committed to doesn’t work. That’s fine! It happens to lots of organisations. Make sure you’re still listening and commit to changing direction when your employee happiness survey results show that something you’ve implemented isn’t working (or has stopped working) for your organisation. 

If you need more insight into how to create an employee engagement and happiness strategy, why not download our free eBook? This comprehensive guide will help you through the whole process!

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About The Happiness Index

The Happiness Index helps organisations measure the key employee engagement AND happiness drivers to power their people strategy.

Our unique platform offers the products, insights and tools to shine a light on your cultural health and empower management to drive thriving cultures.

Our neuroscience-based pre-built surveys measure the full employee experience - from onboarding to exit to empower and enable organisations to understand their people and create data-led action plans.


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