Friday, May 27, 2011

Employee Satisfaction and Happiness: What Is An Employer's Role, If Any?

"What is the proper role of an employer in employee satisfaction and happiness?"

It is a question often asked and the answers reflect differences of opinion.

If employee satisfaction and happiness had no impact on productivity and profits, some, perhaps most, employers would answer the question, "While I'd prefer my employees be happy, it really doesn't matter because it doesn't translate to shareholder return which is my only real responsibility."

But, employee satisfaction and happiness are related to productivity, which leads to a different answer and a new question: "How can I increase employee satisfaction and happiness?"

Most employers, protestations aside, still believe more money is the answer that fixes most problems. More importantly, employees also believe it.

Yet, many studies have belied the linkage, e.g., once an economy reaches an income per person of about $15,000 (measured at purchasing-power parity), economic growth ceases to add to happiness. The United States, for example, is considerably richer than Denmark, but Americans are no more satisfied with their lives.

But, even if money isn't the answer beyond a certain level, most employees don't know it and don't believe it. In that case, is it the employer's obligation, duty or just intelligent business practice to nudge its employees in the right direction? And, what if they don't want to be led?

The aame question was asked in an article entitled, "The Joyless or the Jobless" in today's The Economist, not with regard to employers, but to governments and their duties, if any, regarding the satisfaction and happiness of their citenzry.

The analysis is interesting.

"Sometimes people have the knowledge and the self-command to choose happiness, and they still fail to do so. That is the surprising finding of a recent study by Daniel Benjamin, Ori Heffetz and Alex Rees-Jones, three economists from Cornell University, and Miles Kimball of the University of Michigan. They persuaded hundreds of people to answer conundrums such as: would you rather earn $80,000 a year and sleep 7.5 hours a night, or $140,000 a year with six hours’ sleep a night?

"About 70% of people said they would be happier earning less money and sleeping more. Likewise, almost two-thirds would be happier making less money and living close to their friends, rather than more money in a city of strangers. In response to another question, over 40% said they would be happier paying twice the rent to enjoy a shorter commute of ten minutes, rather than 45.

"These findings support the notion that money isn’t everything. But ask people what they would actually choose, as opposed to what would make them happy, and their answers can sometimes surprise: 17% of those who say they would be happier sleeping for longer and earning less also say they would still choose the higher-paying job; 26% of those prizing short commutes over low rents would still take the cheaper home; and 22% of those who value friends over money would still move to where the money is."

For the employer, like governments, it may be in the best interest of citizens and employees, governments and employers, that people in their charge be happy and satisfied. But whether they choose to be satisfied is uniquely individual and what role government and employers can effectively play is a question for another time.

Have a great weekend.


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