Apart from making life at work more pleasant, do positive emotions at work improve bottom-line performance – what’s the evidence? And if it’s true, what practices should move to centre stage to drive sales, retain talent, foster innovation and engagement, and maximise productivity? Here’s what the research tells us…

In a massive study published in the Psychology Bulletin, leading psychologists in the field of positive emotion, Sonja Lyubomirsky, at the University of California, along with colleagues, reviewed the results of over 200 separate studies involving 275,000 people from around the world. The research found that positive emotions lead to success, not only in our personal lives, but also in business. They impact employee engagement, job satisfaction and performance, customer satisfaction, innovation, absenteeism, and turnover.¹

In other words, positive emotions create a new form of commercial value in business – emotional capital. Here’s how it works.

Job Satisfaction

Evidence from a wide range of research showed that happy people tend to be more satisfied with their jobs. In a meta-analysis of 27 studies of emotion and job satisfaction, researchers concluded that a person’s level of personal well-being accounts for 10%–25% of the variance in job satisfaction. And, it seems that once a happy person obtains a job, he or she is more likely to succeed.

Job Performance

Other studies reviewed the effects of well-being on job performance and identified a significant relationship between positive emotion and strong performance. In one study, for example, Barry Staw and his colleagues at the Haas Business School, University of California, measured the initial level of positive emotions in 272 employees, then followed their job performance over the next eighteen months. They found that, even after controlling for other factors such as age, gender, and even intelligence, those who expressed more positive emotion at the outset ended up receiving better performance evaluations, higher pay and more supervisor support.

Engagement, Absenteeism and Burnout

Interestingly, Lyubomirsky and her colleagues noted that undoubtedly, one of the reasons that happy, satisfied workers are more likely to be high performers on the job is that they are more engaged. Accordingly, the results indicated that they were less likely to show “job withdrawal”—namely, absenteeism, job burnout and retaliatory behaviours.

Attrition Rates and Workplace Conflict

In fact, one study found that employees who experience more positive emotion on the job are less likely to want to quit and less likely to be in conflict with their colleagues. Ok, you might say, so the job market is tight at the moment and this is likely to be one of the key reasons people tend to hold on to the jobs they have, but that doesn’t mean they are necessarily engaged. Of course, you’d be right, up to a point. But it still doesn’t account for the fact that happy employees produce more value. Maybe Homer Simpson summarises the point more clearly than any of us – “Today, if adults don’t like their jobs, they don’t quit they just go in every day and do it half-assed.”

Sure, there will always be the skeptics who admit that happiness may make work more enjoyable and may be ‘nice to have’, but they resist the idea that it delivers real, measurable competitive advantage. Accordingly to the results of this meta-analysis, that’s not a position supported by the evidence!

Many businesses though are convinced by the evidence and have changed the way they do business.

Delivering Happiness: A Path to Profits, Passion and Purpose

Over recent years, this quiet revolution in business has been led by individuals like Tony Hsieh the hip, iconoclastic, and widely-admired CEO of Zappos, the online shoe retailer. In his book ‘Delivering Happiness: A Path to Profits, Passion and Purpose,’ Hsieh explains how he delivered success by creating a corporate culture with high morale that was all about “delivering happiness” by improving the lives of employees, customers, vendors, and suppliers. Similarly, John Mackey, CEO and co-founder of the wildly successful Whole Foods Market describes how it’s possible for leaders to create both wealth and well-being, by “growing the emotional intelligence of their organisations so they can nourish and encourage love, care, and compassion towards customers and team members…”

Emotional Intelligence Predicts Performance

Mackey is right. In the last ten years, the clearest framework for operationalising positive emotion, as a practical set of skills, is emotional intelligence (EI). Recently, in one of the largest and most rigorous studies ever conducted into emotional intelligence in the workplace, researchers found that EI strongly predicted of job performance. The research, published in the Journal of Organisational Behavior, reviewed the relationship between EI and job performance in more than 43 separate studies involving 5795 people and found that emotionally intelligent people make better workers.²

Similarly, in our own large-scale study published this year in the journal Education and Society involving 6,874 professional people from eleven countries, we found a strong relationship between EI and jobs requiring high emotional labour i.e., jobs where the expression of positive emotion is an important part of the job.³ This was especially true when we compared EI and the relative performance of individuals recognised for their outstanding leadership ability. The data suggested that emotional intelligence greatly multiplies a leader’s capacity to execute the role effectively.

And, as Maria Grigorova, Global Director, Mars University’s Marketing College and one of our major clients, said in a recent interview, “If you invest in the emotional intelligence of your leaders you invest as well in much better performing teams.” She went on to say, “it’s all about behavioural change…about building powerful relationships.”

Conclusion

The evidence from these large-scales studies provides business leaders with a compelling reason to change focus from an exclusive preoccupation with simply making money, to building emotional capital in the Organisation. Companies like Mars, Zappos, Whole Foods and many others, are examples of businesses committed to creating high performing cultures by fostering positive emotion through EI. They have moved from controlling employees to encouraging collaboration, and from top-down leadership to inspired conversations and shared goals. They have moved customer focus, team development, employee engagement and EI to centre stage and, as a result, are building businesses that thrive on an emotional economy.

¹ Lyubomirsky, S., King, L., and Diener, E. (2005), ‘The benefits of frequent positive affect: Does Happiness lead to success?’ Psychological Bulletin, 131, 803-855.

² O’Boyle, E., Humphrey, R., Pollack, J., Hawver, T., & Story, P. (2011). The relation between emotional intelligence and job performance: A meta-analysis. Journal of Organizational Behavior 32, 788–818.

³ Newman, M., & Smith, K. (in press). Emotional Intelligence and Emotional Labor: A comparison study using the Emotional Capital Report (ECR). Education and Society.