Human-Centered Management

Happiness Impact on Productivity

Various studies have attempted to answer several questions related to areas that may impact productivity. Three such areas of interest here would be the subjects of emotions impacting productivity, the importance of social interaction and perception, and highly regarded supervisors and their impact on productivity. Supervision and social interaction are included in Herzberg’s Two-Factor theory as being important factors in the development of job satisfaction. An employee’s emotional well-being may impact their perceptions and thus have an outcome on their job satisfaction.

Emotional Impact

Studies on the effects of emotions effects on productivity are not conclusive, but there have been studies done that seem to show some evidence to support the idea that positive emotions can improve productivity and negative emotions can decrease productivity. These studies do not necessarily account for an increase in job satisfaction, but in many ways an increase in happiness can be very similar to an increase in satisfaction.

“It seems, therefore, that positive emotion invigorates people. Yet the mechanism here, so far, is unclear. Does happiness have its effect through greater numbers answered or through greater accuracy of the average answer? This distinction is of interest and might be thought of as one between industry and talent –between the consequences of happiness for pure effort compared to effective skill.”

-Oswald, Proto, & Sgroi, p.14, 2008

Several experiments conducted by Oswald, Proto, and Sgroi (2008) at Warwick University in the United Kingdom found that when individual employees are made “happier” they have an increased productivity of around 12%.  This is not an insubstantial amount. In general terms (as opposed to the practical applications of actually reducing a workforce), approximately 9 people will now be able to do the work of 10; approximately 88 will be able to do the work of 100. The benefits could be in the form of a staff reduction or reduced time to complete tasks. This could prove to be quite a cost saver for employers and may offset costs associated with working to improve employee morale.

One of the studies done by Oswald, Proto, and Sgroi (2008) was conducted using well-established tasks that ask subjects to do a math test with varying levels of happiness. They worked to alter the moods of test subjects through the use of movie clips containing comedy. They were promised a base payment for showing up and another payment based on their performance on the test determined by correct answers. Through self-reporting, it was found that participants were made happier by the film and that those who reported being happier (compared to a control group that was not shown the film) had an improved performance on the test.  This indicates that one’s emotional state can have an impact on their productivity rate.


Data Figure 1: Happiness vs. number of correct answers on a test; Oswald, Proto, & Sgroi, 2008

Supervisor Impact

A study by Wright and Straw (1999) finds results that do not appear to support the idea that worker productivity increases with supervisors rated higher by those workers; the results were rather inconclusive. This is interesting because if productivity increases due to job satisfaction it would support Herzberg’s Two-Factor theory showing that an improved relationship with a supervisor does not make one satisfied with their job it just helps ensure they will not be dissatisfied with it. A good relationship with your supervisor is essential to job satisfaction but it will not make you satisfied with your job.

Perception and Social Circles

Social interactions can have a positive impact on job satisfaction when considering Herzberg’s Two-Factor theory. While this may be true to an extent, personal beliefs were indicated as having an impact larger than social interaction in a study conducted on the experiences of nurses (Ravari et al, 2012). This again highlights the potential difficulty of improving worker job satisfaction and the importance of perception and personality. The cited study did not rule out, and in fact indicated, that social interaction can have some impact on job satisfaction; the effect of this may be more rooted in the importance individuals place on social interaction.

A different study on social circles in the workplace sought to measure how sociability impacts performance (Verbeke & Wuyts, 2006).  What was found was that social circles can increase the performance of employees, although the relationship does not appear to be direct. It was indicated in the study that the social circles can work as an additional method of receiving information that may help in a person’s job and thus improve performance. What may be most alarming to employers is that members of a social circle often display alignment with the goals of the social circle, rather than the goals of the company they are working for. The increase in performance indicated and the group cohesion of the social circle may be partially responsible for an increase in job satisfaction.

In a study by Lin and Kwantes (2014), the researchers sought to determine the perceptions of people in regards to the social interactions of other people in the workplace. The results found that employees expected more sociable employees to receive better performance reviews, be more likely to receive coworker assistance, and they were perceived to have higher job competence. Employees expect a level of social interaction and tend to look more favorably on those that engage in high levels of social interactions. There is, however, no known link between higher social interaction and the actual level of job competence. It may be a matter of what people think someone knows, as opposed to what they actually know.

Job satisfaction and productivity complement each other. An employee that is more satisfied with their job is likely to be more productive. As indicated by these studies, job satisfaction and productivity will not be improved by a better relationship with a supervisor but could possibly be improved by coworker relationships to a certain extent, but there is the potential for the goals of a social group to not line up with the goals of the organization. Perception and personal beliefs may have a stronger influence than sociability on job satisfaction. The emotional state of the employee may also play a role in how satisfied employees are. Considering all of this information, low rates of job satisfaction should almost be expected.


Originally Submitted in Partial Fulfillment of Requirements for the Degree of Master of Science in Administration Concentration in Information Resource Management on April 28, 2015

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The above is an excerpt from the scientific literature review section of my graduate project.




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