Employee Happiness and Well-being

Transcription

1 Employee Happiness and Well-being Yannis Georgellis

2 It is not because I have a lot of money that I pay my workers well but because I pay my workers well I have a lot of money. Robert Bosch

3 On the face of it, shareholder value is the dumbest idea in the world, shareholder value is a result, not a strategy Your main constituencies are your employees, your customers and your products. Jack Welsh

4 "A business that makes nothing but money is a poor business. Henry Ford

5 A business s sole purpose is to generate profits for their shareholders and companies that pursued other missions would be less competitive, resulting in fewer benefits to owners, employees, and society Milton Friedman, 1970, New York Times

6 Profit Maximization max PROFIT = (Total Revenue) (Total Cost) = (Price) x (Output) (wl + rk) Production function: Q = f (L, K)

7 Profit Maximization max PROFIT = (Total Revenue) (Total Cost) = (Price) x (Output) (wl + rk) Production function: Q = f (L, K) Labor

8 Appealing idea: Generate wealth and then distribute!

9 Emphasis on shareholder value

10 Stakeholder Theory of the Firm Firms aim at satisficing rather than maximizing their results. How much profit are we ready to give up in order to keep stakeholders happy? Profit B A

11 Business Models Any resilient business model must be able to create and sustain returns for its investors over time, otherwise, it is likely to go out of business or fashion.

12 Employee happiness as a business model Employee happiness Motivation Productivity/ profit

13 Q1. Are happy employees more productive employees? Happy employees are: Less sick More dependable - stay longer, more resilient - recommend organisation to others More sensitive to opportunities, more helpful to co-workers, more confident, and more motivated, and, thus, accomplish more.

14 Q1. Are happy employees more productive employees? Happy employees are also: More likely to broaden and build skills and social bonds, thus more likely to be productive in social or collaborative work contexts. Perform better in more complex jobs by enhancing creative problem solving. Are more likely to acquire new skills and build social capital that may be utilized at a later time, suggesting that measures of happiness could predict long-term productivity.

15 Q2. How much is happiness worth? Gallup estimates the cost of America s disengagement crisis at a staggering $300 billion in lost productivity annually

16 Q3. Can Happiness replace Profit as a business model? Company valuation The old days The new economy Source: Metacapitalism Means & Schneider

17 Q3. Can Happiness replace Profit as a business model? Company valuation

18 Q3. Can Happiness replace Profit as a business model? Founded by Tony Hsieh, author best selling book Delivering Happiness & CEO of Zappos Happiness is their business model! By focusing on the happiness and wellbeing of workers, Zappos created a positive workplace culture that fuelled their success ($1.2 billion company)

19 What makes employees happy?

20 What makes employees happy? Happiness functions (regressions) Happiness = f(human capital, financial capital, social capital; X) X= vector of characteristics (age, gender, health ) Resource-based approach to happiness

21 Happiness Inefficiency Under-utilize our happiness resources (hedonic capital) Human capital. A. B Happiness Efficiency Frontier Financial capital

22 Empirical estimation of Happiness Efficiency Frontiers Stochastic Frontier Model BHPS data

23 Empirical estimation of Happiness Efficiency Frontiers 38% inefficiency

24 Happiness efficiency over time

25 Personality explains inefficiency Agreeable (+) Conscientious (+) Extravert (.) Neurotic (-) Open to experience (-)

26 Human Flourishing Frontier (HFF) Potential to be achieved Aspiration level Flourishing point Eudaimonia Resource 2. B. A Human Flourishing Frontier (HFF) Resource 1

27 Human Flourishing Frontier (HFF) Implications for HRM/OB Quits / intentions to quit Productivity / performance Do organizations allow their employees to flourish?

28 Thank you