If you run a business and are wondering how to eke more productivity out of your workers, you might assume that the answer is simple: increase their pay. However, this particular piece of conventional wisdom may be painting an overly simplistic picture, research suggests.

According to one study at the University of Warwick, happy workers are 12% more productive, Fast Company reports. However, as you can probably attest as a worker yourself, the financial rewards aren’t strictly the only reason for you to take immense satisfaction in your job.

The research-backed link between happiness and productivity

The Warwick research also found that unhappiness made workers 10% less productive. The researchers explained: “We find that human happiness has large and positive causal effects on productivity. Positive emotions appear to invigorate human beings.”

Other research vouches for these findings. In an article on the World Economic Forum’s website, academics from the London School of Economics and University College London report: “Higher employee wellbeing is associated with higher productivity and firm performance”.

Why is happiness so beneficial for productivity?

The London academics, whose findings are borne out of a meta-analysis of 339 independent studies gathered by the research firm Gallup, observed that employee satisfaction has “a substantial positive correlation with customer loyalty and a substantial negative correlation with staff turnover.”

The researchers also described the correlation with productivity as “positive and strong”. They further cited human relations theory’s belief that “higher employee wellbeing is associated with higher morale, which, in turn, leads to higher productivity”.

Nonetheless, the academics acknowledged seeing productivity gains differ by sector. They were particularly strong in the finance sector, leading to speculation that the relatively stressful working conditions in that industry could potentially erode the appeal of higher pay.

Shawn Anchor, the author of The Happiness Advantage, has discovered that, when someone feels positive, their brain operates much more effectively. The improvements permeate through to the functions of creativity and solving problems.

There is a multiplying effect that comes with happiness. Happy employees make good role models for other workers and these will encourage others to be happy. Happiness is contagious and therefore you have to do all that is within your means as a leader to ensure the workers are happy.

What cue should businesses take from all of this?

Basically: to direct more efforts into supporting employees and improving their satisfaction. Carrying out such initiatives led Google to record a 37% growth in its employees’ satisfaction – yet more evidence that financial incentives alone can’t spur workers to realise their full potential.

If your employees are constantly tied to the office, you could also consider un-tethering them for some of their working week. One Gallup poll indicates that, though engagement does not hugely differ between full-time remote workers and full-time office workers, there are noticeable improvements in reported engagement for staff who work remotely some of the time.

Imagine you have 100 employees in your office; that is a huge burden for the company and could mean you spend some substantial part of the company budget to make them comfortable. You could make it optional for them to work remotely from the comfort of their homes with clear targets. This would reduce the pressure on the available resources while maintaining high productivity.

A perfect way to ensure happiness in the office
Acting on employees concerns promptly works perfectly to ensuring happiness in the office. Research shows that conflicts at the workplace occur due to communication breakdown. Thus you must ensure that there is clear bottom-up and top-down communication within the company. The employees should feel free to share their issues freely and you must ensure that you respond to them without delay. Let them engage in discussions freely and create more avenues where they can give their opinions and critique. This makes them own the company and you can be sure of increased productivity.

This finding has led Quartz to declare: “The happiest worker spends about one day a week in the office”. However, with more of your staff out of the office at a given time, you might want to redesign that office to make it more streamlined. That’s where the input of workplace design experts can help. You want to create a lean but effective workplace – and those gurus know how you can.