Andrew Carlo Roxas has written this article for our content marketing challenge. The article explores 3 facts to you understand how happy employees lead to happy customers – and what you can do.

Enjoy!

Recently, a new business model has emerged that brings a fresh perspective to the link between organisations and customers and its effect on business performance: the ‘happy employees equal happy customers’ model.’

In the case of Zappos, an e-commerce site know for its superb customer service and return policy, this philosophy of creating a so-called culture of happiness has been key to their success, and they have the numbers to prove it (Adaddy, 2015). In 2009, the company was bought by Amazon for $1.2 billion dollars and has been constantly growing ever since.

For Tony Hsieh, the CEO and Founder of Zappos, this success can be attributed to the culture of the company: ‘A company’s culture and a company’s brand are really just two sides of the same coin.’

This new paradigm has employers and corporations shifting their HR policies to create this ‘happy’ organisation and to satisfy their employees in an effort to trickle down this satisfaction to customers.

But is this really possible?

Here are three facts that will help you better understand how happy employees equal happy customers:

1. Happiness makes you more productive at work.

Many studies have shown that happiness positively correlates to productivity.

The Social Market Foundation in Great Britain carried out a productivity experiment by exposing individuals to happiness ‘shocks’ (either by showing a 10-minute comedy clip, giving food and beverages, or asking questions that were specifically designed to make the individuals happy). They were then tasked to complete a test to determine their level of productivity.

The experiment concluded that the bursts of happiness significantly increased productivity on an individual level. In fact, the participants’ productivity increased by 12% on average and as high as 20% compared to the control group (Addady, 2015).

Exposing yourself to happiness – not just laughter – might really be the best medicine.

2. Happy employees improve the performance of the business.

Employees have been chanting this for years.

To motivate them better, they want higher compensation, better access to resources, relevant trainings, competitive benefits, and – of course -– a ubiquitous work-life balance. In return, these employees provide valuable services that influence client satisfaction (Heskett, 1994).

Does this motivation bring better performance to the organization?
The answer, unsurprisingly, is yes.

Two studies, one based on a sample of 475 firms across different industries and another based on the top 100 companies, showed evidence of a positive correlation between firm performance and employee satisfaction. The main factors specific to their job performance that contributed to their satisfaction include compensation and benefits, job security, leadership, and work/life balance (Melian-Gonzales, 2015).

Thus, the responsibility of enhancing employee satisfaction is therefore not only a function for Human Resources, but also for management in general.

3. Creating a culture of happiness doesn’t happen overnight.

Zappos has become the ever-present poster child for the so-called ‘happy’ organization. However, many companies across various industries have already been implementing this type of corporate culture.

Facebook, Google, and Salesforce.com, titans of the technology and information industry, have consistently boasted high employee satisfaction by creating strong corporate culture coupled with generous salaries, employee engagement programs, and perks that go beyond the workplace (Loudenback, 2016).

Some companies have also implemented programs founded on the core values which are highly prioritized by their employees. For example, companies whose employees value work-life balance may implement programs such as memberships to health clubs and gyms, vacation options, and extended maternity and paternity leaves to keep employees happy and productive.

However, these companies didn’t build this positive corporate culture overnight. Google, for example, forged its impressive corporate culture throughout the years by gathering data about its employees and conducting experiments carried out at the workplace.

It took many years for these companies to implement the optimal culture that enables them to do well in their respective businesses.

Accomplishing this happiness culture and linking it with business performance is, therefore, a long-term process which involves the commitment of the whole organisation.

Now what? What can you do to start taking the right steps towards happier employees?

As a leader, the first step is to start by getting your employees engaged, not just satisfied.

Employee satisfaction measures how happy employees are with the organisation’s policies and practices such as compensation, regulation, and leadership. Generally, these practices and policies reflect the organisation’s culture and are often difficult – or seemingly impossible – to change.

Focusing on engaging your employees rather than satisfying them, however, can make a difference. An engaged employee is more motivated to directly contribute to the success of the company. They also create a positive effect on other employees, thereby developing a committed workforce (Madan, 2017).

There are many paths a leader can take to engage employees. A leader may focus on maximising his or her team’s potential by creating a safe environment for collaboration, by opening lines of communication, and by enabling individual empowerment.

Remember that at the heart of an engaged employee is the drive to go the extra-mile – to get involved in the company’s goals and, eventually, the needs of the customer.

As an employee, it’s time to shift your mentality from receiving to giving.

Employees frequently think of what they can receive from employers such as monetary compensation, personal and work benefits, an extended network, and potential promotions, rather than what they can give or contribute to the company (Daryani, 2008). This survival mindset, while not unusual, often leads to choices that may be detrimental to the success of an employee and the company over the long-term. These self-serving decisions on behalf of individuals come at a cost to the company: internal competition, silo formation, and an unmotivated work environment.

Rather, employees should choose to leverage the competencies and abilities that they can synergize with the company and focus on the shared goals they can achieve together.

After all, as the famous fictional character Albus Dumbledore said, “Far more than our abilities, it is our choices that show what we truly are.”

References:

Addady, Michal (2015). Study: Being Happy at Work Really Makes You More Productive. http://fortune.com/2015/10/29/happy-productivity-work/

Daryani, Ritesh & Sunanda, Surabhi (2010). Engaging the workforce – Employee Value Proposition and Culture Building, HR-2010 Innovate or Stagnate, National HDR Network.

Heskett, et al (1994). Putting the service-profit chain to work. Harvard Business Review, Vol. 72, March-April, pp. 165-174.

Llopis, Glenn (2015). 6 Things Wise Leaders Do to Engage Their Employees. Forbes. https://www.forbes.com/sites/glennllopis/2015/02/02/6-things-wise-leaders-do-to-engage-their-employees/#4430b3247f5d
Loudenbacket al (2016). 13 of the Happiest Companies in America. Business Insider. http://www.businessinsider.fr/us/payscale-best-companies-with-happiest-employees-in-america-2016-4/

Madan, Silky (2017). Moving from Employee Satisfaction to Employee Engagement, International Journal of Research in Commerce & Management. Vol. 8: 6, pp. 46-50.

Melian-Gonzales & Bulchand-Gidumal (2015). New Evidence of the relationship between employee satisfaction and firm economic performance. Personnel Review, Vol. 44:6, pp. 906-929.

Seppala &Cameron (2015). Proof that positive work cultures are more productive. Harvard Business Review. https://hbr.org/2015/12/proof-that-positive-work-cultures-are-more-productive