Employee happiness and productivity: what it means for leadership training

Amy Owens

Written By Pat Ashworth, Director of Learning Solutions, AdviserPlus.

12th November 2019

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New evidence linking employee happiness and productivity should have profound implications for the way organisations train their managers and leaders.

Finally, there’s concrete evidence to support what HR managers have always suspected: happier workers really are more productive.

In a new research paper presented to the All-Party Parliamentary Group on Wellbeing Economics at Oxford University’s Saïd Business School, 1,793 BT workers across 11 call centres were proven to make more calls – and also improve their selling rates – when their mood was happier.

Oxford’s Professor Jan-Emmanual De Neve said “there has never been such strong evidence” to support the popular management theory that encouraging happiness at work isn’t just good for employees, but for business.

For those of us who work in learning, development and HR, the proof is welcome – but hardly a surprise. The real question is: what will we do about it?

Happiness and productivity hinges on leaders and managers

The research adds further weight to the idea that organisations need to re-think the role of leaders and managers: how they’re selected, how their performance is measured, and – crucially – how they’re trained.

The study showed that many of the factors which impact employees’ mood, and hence their productivity, are beyond our control. We can’t prevent rainy days (which were proven to impact work), and our influence may also be limited when it comes to salary, job security, and the content of the work.

However, we do have access to one large lever which, according to the research, has a significant impact on outcomes: relationships with colleagues and managers.

In his talk Why Leaders Eat Last, ethnographer Simon Sinek explains the brain chemistry behind good leadership – and why managers have such a powerful influence on our happiness at work.
The stress hormone cortisol once served a useful purpose by making us more alert to danger. To achieve this heightened state of readiness, it suppresses growth, social instincts, and immune response. And while it was a short-term state to keep us alive, that worked well.

But if our work induces ongoing stress, then we’re subject to a constant drip-feed of cortisol. That can overflow into undesirable behaviour, and potentially has long-term health impacts.
It also affects our ability to work in a team. Cortisol suppresses the release of oxytocin, the hormone that makes us empathetic and generous. Meanwhile, we’re anthropologically programmed to respond to cortisol in others, so elevated levels of stress are catching.

And we get those cues disproportionately from the behaviour of – you guessed it – our leaders.

Managers who are themselves stressed will naturally exhibit less compassion and empathy, and prompt similar responses in the teams they lead. That means our relationships with colleagues and our relationship with our manager are closely linked – so helping managers to manage their own wellbeing is an essential part of workplace happiness and productivity.

Mindfulness: an underrated management tool

A manager who is stressed or anxious can make their team less co-operative. By contrast, a leader who exhibits empathy and compassion can create a stronger team bond, generating happiness and – as proven by the research – productivity.

The science journalist and author Daniel Goleman talks about three kinds of empathy, all of which are important in leaders who want to get the best from their teams:

Cognitive empathy, which is the ability to see someone else’s point of view. This helps a manager to understand why employees are behaving a certain way, and what might help.
Emotional empathy, which is the ability to feel what someone else is feeling. This enables managers to help team members feel genuinely cared for.
Empathic concern, which feeds the desire to actually help the other person, based on what you know. This is a key differentiator, because it acts as the ethical rudder allowing empathic thoughts and feelings to change behaviour.

But to exhibit more empathy, managers need to keep their own cortisol levels under control. One powerful way to achieve this is by practising mindfulness techniques.

Mindfulness isn’t regularly discussed as a central part of leadership development, but the business impact can be significant. We worked with the Post Office to implement a mental wellbeing programme, and it returned more than half a million pounds in cost and productivity savings. That’s the kind of result that deserves to be taken seriously.

Four steps to improve productivity through leadership empathy

Matters like mindfulness, empathy and wellbeing need to be approached in a clear, structured way, if they’re to be accepted in the business. An effective, four-step process might include the following:

1. Measure employee engagement with a good-quality survey. A clear picture of your current culture is an important baseline for your intervention. It’s worthwhile to invest in nuanced measures that give an accurate view of “what it’s like to work here”. A separate measure of faith in line managers and/or leadership overall might also be useful.

2. Invest in line management training, with a focus on self-awareness. This will help managers to reflect critically about the climate they create in their team, learn a degree of cognitive control over thoughts and emotions, and estimate how much they allow stress or anxiety to leak out to others at difficult times.

3. Introduce further, tailored support to address gaps revealed by the first two steps. Measures might include workshops and quality coaching, to define goals and establish good habits. Some managers will be open to change; others might need encouragement – changing learned behaviours can feel strange at first.

4. Re-measure to confirm the effect of your work – not only in employee happiness and engagement, but also in business outcomes like attendance, productivity, and performance. This evidence is essential to demonstrate the return on your investment and convince further managers to participate.

Empathy is not softness; it’s a business skill, with tangible results

There’s a common misconception that empathetic managers are soft and allow employees to get away with too much. Actually, it’s more often about clarity – enabling a good quality conversation combining both challenge and support – so people know exactly what’s expected, and how they can achieve it.

Similarly, organisations reading Oxford University’s BT study won’t achieve a similar uplift in productivity by buying employees chocolates and cakes or allowing them to dress casually. Those things can be helpful, but unless the change starts with leaders – role-modelling empathy and cognitive control – the change will only be superficial.

Often, leaders get the behaviour they deserve: their unspoken behaviour sets the tone for the team. So, if you want to drive happiness and productivity, give your managers the tools to manage themselves first.

Our eBook: How to equip your managers to support HR, is available to download.

Find out about AdviserPlus’ Manager Essentials and Mental Health Awareness training.

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