Why Making Employees Happy Pays Off

April 10, 2014

Richard Branson

The Founder & Chairman of the Virgin Empire, TED Speaker

Happy employees are central to the success of a business. We all instinctively know this, but it can be hard to pinpoint why. Nobody would argue that employees should be sad and downtrodden, yet it seems as though some businesses and their managers set out with the intention of presiding over a group of miserable people, and then succeed in doing just that.
First, the scientific evidence: Research released this month by the University of Warwick in Britain confirms that on average, happiness makes people 12 percent more productive. One of the researchers, Andrew Oswald, said in a press release:

“Companies like Google have invested more in employee support and employee satisfaction has risen as a result. For Google, it rose by 37 percent; they know what they are talking about. Under scientifically controlled conditions, making workers happier really pays off.”

How can you make your employees happier? The researchers offered their test subjects chocolates and fruit and the chance to watch comedy clips before they set them to work. A business can’t rely on snacks, unfortunately -- eventually the effect would wear off. The most common rewards that businesses offer, bonuses and raises, also have a limited effect. After all, there are lots of people who are very well paid, yet miserable in their jobs.

Whether you’re launching a startup or managing an established enterprise, you have to go out of your way to make people happy -- it doesn’t just happen. Create this job for yourself, just like the Himalayan kingdom of Bhutan created the Gross National Happiness Commission, overseen by a secretary whose task is to look after the population’s happiness.

You need to think about what your crew needs to stay engaged, and what motivates them in the long term. The basics are well-designed offices with plenty of sunlight, stimulating tasks to work on and a fair reward. Research also shows that a healthy workforce is a happier one -- people are more productive and out sick less often. Building on that, a few years ago we invested in Virgin Pulse, a business that is focused on helping companies to encourage their employees to be more active through a reward program.

We at Virgin also find a flexible working policy to be very effective. These guidelines, which we have introduced at almost all our companies over the past few years, effectively mean that as long as they do their work, our employees can work whenever they want, from wherever they want.

It wasn’t easy to put this system in place: Our team invested in research beforehand to make sure it was workable, and once we all agreed, we had to encourage a change of culture across our offices. Yet that was a small price to pay, because it’s what our employees wanted, and we knew that demonstrating respect and trust in our employees would boost their happiness levels, and in turn, their productivity and creativity.

But beyond creating good policies, you need to think about what makes your company different, and help your employees to celebrate that. If it’s the sense of mission, then give them the tools they need to keep in touch with how your business is progressing toward its goals. If it’s engagement with customers, then empower your people to take the lead as they help your clients. If you need clues about where to begin, pay attention to where the happiest employees are in your business, since this can indicate that something is working very well -- something that can be replicated elsewhere.

And finally, keep in mind that you became an entrepreneur because it’s fun. So celebrate your achievements and those of your employees, because each one is a step on the road to your business’ success. If you’ve been working on a project that has required people to work long hours, when it’s done, let loose a little and give people a chance to reconnect outside the office.

Last year Virgin Management moved from its London office to a new spot in Little Venice, West London. It was a big few months for the team, who put in some long days and even longer nights preparing for the move. After the job was done and everyone had settled in, we decided to throw a pirate-themed party to thank the group for all the hard work.

We had a great time! But the next day we found ourselves on the front page of the local papers, because the neighbors had called the authorities to complain about the sound of our steel drums on the roof terrace, which perhaps played a little later into the evening than they should have. While we did apologize for the inconvenience, that was a night nobody in the office will forget, and it did wonders for reviving our team spirit.

You will probably find your position as manager of jolliness very satisfying. A few days ago someone sent me a link to a video made by Virgin America staff -- a recreation of the video for Pharrell Williams’ song “Happy." In turn, that display of employee satisfaction made me very happy. (And by the way -- nice moves, guys!)

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Source: Entrepreneur