Does Employee Happiness Cause Business Success?

Posted June 06 2014

In a recent article, Stephen J. Gill inquires as to whether employee happiness causes business success. While the belief is that happy employees are more "engaged in their work, have a sense of wellbeing, have purpose, feel they are doing meaningful work, and have a belief they can be successful in their jobs, and more likely to achieve positive business outcomes."  While various reports (e.g., Harvard Business Review, Towers Watson) indicate a correlation, there doesn't appear to be a direct correlation to back up this assertion.


Stephen makes a great, thought-provoking point.  Given the number of factors that impact business success, it's difficult to establish direct correlation.  That said, as Stephen shares, various surveys/reports indicate correlation. 


Stephen inquires about any evidence to the contrary.  While we wouldn't suggest this as evidence to the contrary, let's look at low cost airlines.  It's well known that Southwest Airlines prides itself on employee happiness, while other carriers (e.g., Easjet, Spirit Airlines, Southwest) prioritize low cost and a la carte pricing.  If you look at business success (we selected stock price in this case), while Ryanair had the lowest % increase over 5 years (108%), Easyjet (401%) and Spirit (400%) exceed Southwest (315%).  That said, there are many factors that impact business success (e.g., market factors, leadership, organizational structure), and CTK agrees with the reports that investments in talent management and employee satisfaction correlate with employee success and business success.

Does Employee Happiness Cause Business Success?
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