Testing the Happiness Factor

Time for the skeptics to weigh in: Does happiness really impact the bottom line?

Posted Jan 05, 2014

Tony Hsieh wanted his online retailer, Zappos.com, to be a happy place, and so he designed a happy culture.

Today, he and his team are helping others do the same. I recently spent some time at Delivering Happiness at Work, a consultancy that Hsieh has launched to teach all sorts of organizations how to “become more successful through the science of happiness.” The three-day culture boot camp that I attended was chock-full of senior executives seeking to “happify” their organizations.

Time for the skeptics to weigh in: Does happiness really impact the bottom line? Can it really make you more successful?

One of the implications of my Ofactor theory of organizational design (discussed here and here) is that Trust x Purpose = Joy. So, let’s put the theory to the test.

A number of companies that have taken my Ofactor organizational trust survey have also allowed my team to include their employees in on-site neuroscience experiments in which we measure a variety of physical factors, including their production of oxytocin, the “moral molecule” that drives cooperation, bonding and empathy. Here’s what we’ve found:

 Test 1: Do Trust and Purpose really produce Joy?

While fostering trust among work colleagues and developing a strong sense of a company’s core purpose have a moderate correlation with each other, organizations that exhibit both of these characteristics clearly have happier, more engaged employees. Indeed, Trust x Purpose is positively and highly correlated with how much Joy people reported at work. This result was highly statistically significant, having a less than 1-in-10,000 chance of occurring due to random causes.

Test 2: Does Joy affect productivity?

In our studies, we asked people to do cognitively taxing work-type tasks for which they were paid, but only if they completed these tasks accurately and quickly. Comparing those in the top quartile of Joy with those in the bottom quartile, the top group was 5% more productive. High Joy colleagues’ cardiovascular systems also shed the stress of work more than 200% better than those with less Joy.

Test 3: Does Joy affect innovation?

We asked employees in groups of four to, under time pressure, find a solution to an unusual problem that they had not seen before. We did not find a direct effect of Joy on innovation. But we did find that Joyful people felt closer to those with whom they worked. In turn, those who were in the highest quartile of closeness to colleagues were 22% more productive finding innovative solutions and enjoyed it 10% more than those in the bottom quartile.

Test 4: Does Joy on the job carry over outside of work?

Those in the highest quartile of Joy at work are 17% more satisfied with their lives overall. Joy in the job makes for happier partners, parents and citizens. This finding wouldn’t have surprised Peter Drucker. “In our society of organizations,” he wrote, “it is the job through which the great majority has access to achievement, to fulfillment and to community.”

A recent study from my lab showed that the higher productivity of Joyful employees, like those at Zappos, is about 50% due to personality traits—hiring happy people in the first place. The other 50% is under your control; it is a response by employees to their organization’s culture.

With that in mind, I hope that you and your colleagues create abundant Joy in the New Year.


This post originally ran in The Drucker Exchange January 2, 2014 and is used by permission.