I believe that Shawn Murphy is right. Employees who are engaged in their work, are satisfied, have a sense of wellbeing, have purpose, feel they are doing meaningful work, and have a belief they can be successful in their jobs, are more likely to achieve positive business outcomes than employees who are unhappy in their work. The problem is that there doesn’t appear to be evidence to back up this assertion.

All of the well-publicized research on this relationship is correlational and, therefore, we don’t know which is causing which or if other factors (such as leadership, organizational structure, R&D, etc.) are more important than employee happiness. In an opinion piece for the NY Times titled, Why You Hate Work, the authors report results from an employee survey they did with the help of Harvard Business Review. The authors observe:

Engagement — variously defined as “involvement, commitment, passion, enthusiasm, focused effort and energy” — has now been widely correlated with higher corporate performance.  

A 2012 global survey by Towers Watson found a high correlation between “happy” employees and a company’s profitability. Gallup does a survey of companies every few years and consistently reports a …well-established connection between employee engagement and nine performance outcomes: 

  1. customer rating
  2. profitability
  3. productivity 
  4. turnover (for high-turnover and low-turnover organizations)
  5. safety incidents
  6. shrinkage (theft)
  7. absenteeism
  8. patient safety incidents
  9. quality (defects)

These are impressive studies that suggest but do not confirm a causal link. A highly plausible alternative explanation is that doing well on some or all of these performance outcomes causes (or, at least, contributes to) employee engagement and happiness. Like me, I’m sure you know companies that have been productive and profitable while having a high-turnover workforce that is quite unhappy with work conditions. Or you know companies that have what appear to be wonderful work conditions but have failed to be profitable and sustainable.

Let me be clear. It’s logical that high engagement, what Rich Sheridan calls “joy”, helps companies achieve success. Some company stories would seem to support this conclusion. However, at this point, that is a hypothesis that has not been proven.

If you have evidence to the contrary, please let me know in a comment below.

Written by Stephen J. Gill of TypePad