Happiness at work: why it counts

Bad management and bullying in the workplace wil affect productivity. Photograph: Aiste Miseviciute/Alamy

Is it worth measuring the nation's happiness? That was the question posed at the Work Foundation's annual debate last month, inspired by the government's move to incorporate questions on wellbeing into the Office for National Statistics's quarterly national citizen's survey.

With politicians in many countries now talking about gross national wellbeing, new books devoted to finding happiness being released and the proliferation of wellbeing indices such as the Happy Planet Index, a "happiness agenda" is emerging. But how will a national measure of this help enhance wellbeing throughout the UK's workforce, particularly at a time of economic instability, high unemployment and intrinsic job insecurity?

The absence of wellbeing in the workplace is costly. In the government's recent Foresight Programme study on mental capital and wellbeing, it was estimated that sickness absence, presenteeism (being present at work but contributing little added value to the business) and labour turnover cost the country about ?26bn a year.

Incidences of stress-related sickness absence have also risen, replacing backache as the main source of work illness, with 40% of incapacity benefits (the biggest source) attributed to mental ill health and stress. Indeed, the 2009 Boorman review for the NHS into health and wellbeing indicated savings of over ?555m could be made from reduced sickness absence if healthier work environments were created.

So there is a bottom-line argument for minimising workplace stress and enhancing wellbeing. Stephen Bevan, managing director of the Work Foundation, feels the government may also have another motivation for attempting to measure happiness: "We are likely to see GDP grow very slowly over the coming decade or longer, so governments will need another measure of success than economic growth."

Bevan also points out: "If we take the happiness agenda seriously and make the changes that would enhance wellbeing at work, we could see real bottom-line benefits in terms of sickness absence and greater productivity from more engaged workers."

There is a growing body of evidence to suggest we are motivated at work by things other than money and that, as long as we are relatively job-secure and earning a reasonable wage, the quality of working life is at least as important. In the Mercer global engagement scale – developed with thousands of workers in the UK, US, Japan, India, Germany, France and China – "base pay" as a motivator comes low down a list of 12 factors that engage workers.

The top motivator is "respect" – how valued and trusted by their organisation employees feel. Then comes (in order of priority) "type of work", "providing good service to customers", "the people you work with" and finally, good "work-life balance". Only after these does pay come into the equation. Given the recent controversies over bankers' pay, it's interesting that "bonuses" come bottom of the list.

All this should support the findings of the recent review into the fairness of top public sector salaries by executive chairman of the Work Foundation Will Hutton, which recommended a maximum salary for senior executives of 20 times that of the lowest paid.

President Franklin D Roosevelt said during the Great Depression that "true individual freedom cannot exist without economic security and independence … people who are hungry and out of a job are the stuff of which dictatorships are made … the hopes of the Republic cannot forever tolerate either undeserved poverty or self-serving wealth."

The way jobs are shaped, by both managers and employees, has a huge impact on our sense of wellbeing at work. But the quality of work is in danger of being neglected, especially when people are worrying about unemployment. The focus in much of the happiness debate is on the primacy of being employed and people's perceptions of their income relative to others.

While there may be some truth in the Anna Karenina principle that all happy families are alike, but every unhappy family is unhappy in its own way, we increasingly have a better understanding of what makes for unhappiness and stress in the workplace. If people don't have much control over their jobs, are not engaged and involved in decision-making, consistently work long hours, and are badly managed or bullied, they will suffer.

There are ways of treating people at work that can make them happier that have little to do with money or bonuses. This has been confirmed by research based on the government's Workplace Employee Relations Survey, endorsed by the Health and Safety Executive and reflected in the National Institute of Clinical Excellence's guidelines on managing workplace stress.

So what can we do to make our workplaces happier environments? First, we need managers with better social and interpersonal skills, who manage people by praise and reward and not fault-finding (because few managers do this, a pay rise is often the only time people feel their contribution is recognised). Second, individuals should have autonomy and control over their work – the absence of micro-management. Third, there needs to be a shorter working hours culture, where appropriate flexible working arrangements are available which people can take up without damaging their careers or feeling guilty. Fourth, there should be manageable workloads and achievable deadlines, and finally, a culture should be encouraged in which employees feel valued and trusted.

Alistair Blaxill, executive director of Communisis, one of the UK's biggest marketing services providers, says the happiest companies he has worked for are those that "give their staff 'wriggle room', don't micro-manage, let people know when they have done a good job, make them feel part of a family and ensure reasonable work-life balance".

Yet despite all the supporting evidence, some of these basic ingredients are not being applied. And if that's the case, how will a national measure of happiness help? We think it will do so indirectly – by motivating businesses and politicians to do better when international and corporate bench marks are put into the public arena by business and social commentators.

But developing this wellbeing index is also a high risk for the government, because over time it could highlight a worsening in people's happiness levels, holding government accountable. On the upside, the government will need to take action to enhance wellbeing, as it does when responding to slow economic growth or declining gross domestic product (GDP). Which reminds us of the old Japanese proverb "a vision without action is a daydream, action without vision is a nightmare".

In launching the inclusion of wellbeing items in the Office for National Statistics' survey a few months ago, the prime minister emphasised that GDP was not a good measure of a society's success.

In doing so, David Cameron echoed the sentiments of US senator Robert F Kennedy, in a speech he gave at the University of Kansas in 1968. "Gross national product does not allow for the health of our children, the quality of their education or the joy of their play," Kennedy said. "It … measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile."

• Cary L Cooper is distinguished professor of organisational psychology and health at Lancaster University Management School and co-author of Wellbeing: Productivity and Happiness at Work; Stephen Wood is professor of management at Leicester University

This test is a rough guide. It explores your feelings about your boss and colleagues, the pressure of your workload, your autonomy and control, and work-life balance issues. Circle the answers that best fit the statements.

1. My boss tells me when I do a good job

2. I am given a great deal of discretion in how I do my job

3. There is pressure at the office for me to work long hours

4. My job provides me with a lot of variety

5. My work colleagues are very supportive

6. I look forward to coming to work

7. I am overloaded at work

8. I get stressed from my job

9. I feel secure in my job and in the organisation

10. I feel valued by my organisation

Award points as follows: 1. a)1 b)2 c)3; 2. a)1 b)2 c)3; 3. a)3 b)2 c)1; 4. a)1 b)2 c)3; 5. a)1 b)2 c)3; 6. a)1 b)2 c)3; 7. a)3 b)2 c)1; 8. a)3 b)2 c)1; 9. a)1 b)2 c)3; 10. a)1 b)2 c)3.

23-30: You go to work whistling a happy tune, probably to the irritation of colleagues and friends.

17-23: Work can have its ups and downs, but by and large you make it through the day unscathed.

10-16: It might be time to start dusting off the CV and browsing the job ads – but then you probably already know that …

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