How to Invest in Happiness Without Blowing Your Budget

It is a corporate truism that happiness begets productivity. There is a slew of data to support this idea, such as the extensive work of Teresa Amabile or this Gallup poll by James Harter. More recently, perks have emerged as the choice tactic for companies seeking to boost employee happiness. So much so that companies, from entrepreneurial startups to established enterprises, hire perk managers to engineer creative perk programs.

We here at PerkSpot know that not all perks are created equal.

We are also aware that not every business can afford a $10,000 per employee desk allowance or a month-long office adventure to Thailand. We’ve dug deeper into the wealth of research on the happiness-productivity model and hope that our findings will suggest some cost-effective ways to invest in workplace happiness that will ensure your highest ROI. A number of recent studies point out that broader psychological factors have the strongest implications for increased workplace productivity. Professor John Zelenski demonstrated that “positive affect” is more strongly tied to high productivity than either “job satisfaction” or “quality of work life.”. In another study, Thomas Wright found that increased job satisfaction yields increased productivity only when employees already have a high level of psychological well-being (PWB). Employees who score low on “life satisfaction” stay home an average of 15 more days a year, states Gallup Healthways. Another Gallup study showed that retail stores scoring high on employee life satisfaction generated $32 million more in earnings than less happy competitors. The data suggests managers should focus on perks that promote more general psychological factors like life satisfaction and psychological well-being. An office ping-pong table may seem sure to increase employee happiness. However, MetLife’s Benefits Trends Study suggests that offering a financial education program may be more effective. According to the study, 54% of employees worry about their financial security; while 51% of employers strongly agree employees are less productive when they worry about personal financial problems. 57% of employers agree that offering financial education to employees has a positive impact on productivity.

Don’t underestimate the benefit of perks that cost you nothing.

A recent study by Nicholas Bloom and John Roberts focused on China’s largest travel agency. They found employees permitted to work from home were 13% more productive and 50% less likely to leave their jobs. Considering the cost of replacing an employee can range from 90% to 200% of their annual salary, this is significant. In fact, FastCo.Design says you may see similar upticks in productivity from changing your office environment. They suggest converting a portion of your office into spaces akin to employees’ homes (think sofas, café tables, etc.). Increased time with family and friends can strongly reinforce the high levels of psychological well-being that promote job satisfaction. It’s no surprise, then, that the Society of Human Resource Management reports that 30% of employers offer discounted tickets to movies, theme parks, museums, and more in order to encourage more family outings. We hope that our research sheds some light on the burgeoning world of workplace perks. Perks geared toward enhancing employees’ lives outside the office can result in the largest jump in job satisfaction and productivity. The above examples suggest some cost-effective starting points for anybody looking to build a perks program into their office culture. Want more insights like these? Subscribe using the form to the right!