New research shows first causal link between wellbeing and productivity

How we feel matters at work

The findings of Bellet and his co-authors have been published in the journal Management Science and serve as the clearest real-world evidence of wellbeing’s impact on worker performance to date. The study of almost 1,800 British Telecom call centre workers shows that a one-point increase in happiness (on a scale of 0 to 10) was associated with a 12% increase in their productivity, as measured by weekly sales data.

Co-author Jan-Emmanuel De Neve, Director of the Wellbeing Research Centre at the University of Oxford and a Professor of Economics and Behavioural Science at the Saïd Business School, says: ‘There is no question that caring for how employees feel at work is the right thing to do. Both the moral and business cases are now settled, especially given our most recent field research showing that employee wellbeing drives productivity as well as recruitment and retention of talent which, in turn, has measurable impact on a company’s overall financial performance.’

Happiness has an impact on productivity

Researchers Bellet, De Neve and Ward have used a well-established mechanism for measuring subjective wellbeing in the form of a weekly one-question survey emailed to workers, asking them to rate their happiness for the last week on a five-point scale. These scores were then anonymously mapped to workers’ individual performance for the same period, which showed a positive correlation between happiness and productivity. The results build on previous research showing mood effects in laboratory settings and demonstrate that happiness has an impact on productivity when it comes to workers, tasks, and jobs in the real world.

The effect of happiness differed across tasks. Simple ‘order taking’ calls were less impacted by a worker’s mood, whereas more complex tasks – like negotiating, selling bundles of products, and re-contracting – saw productivity increases closer to 20%, on average, per one-point improvement in happiness.

Co-author George Ward, a Research Fellow in Economics at the University of Oxford and recent graduate of the MIT Sloan School of Management, adds: ‘Our findings suggest that the relationship between mood and productivity is not always a straightforward one, and can depend on the types of jobs people are doing. Mood seems to be a particularly strong driver of performance in tasks that require human interaction and where social and emotional skills play a large role in how productive someone is. These types of jobs make up a growing share of the economy, suggesting that the importance of worker happiness is likely to increase over time.’

Bellet, De Neve and Ward went a step further to test the robustness of their findings, by using data on the number of windows across the call centres combined with weather conditions – to use differential visual exposure to weather across workers as a form of natural experiment.

They were able to identify trends in mood that correlated with visual weather conditions – with workers reporting lower happiness on gloomy days, particularly in call centres with lots of windows where workers are visually exposed to the changeable patterns of British weather.

Clément Bellet explains: ‘We made an important contribution to the field by not only directly measuring employee happiness but also isolating the effect of weather exposure on mood using the diverse architecture of BT office buildings. This was a challenging task as past research on weather and mood often assumed the impact of visual exposure without measuring mood directly. By isolating these weather-induced mood shocks, we were able to gain deeper insights into the causal impact of mood on performance in a real-world setting.’

About the researchers

Clément S. Bellet is Assistant Professor at Erasmus School of Economics. His work borrows from behavioural economics and marketing research to study how social inequalities, discrimination and emotions affect customer purchase behaviours, customer-worker interactions, and firm performance.

Jan-Emmanuel De Neve is Director of the Wellbeing Research Centre at the University of Oxford and Professor of Economics and Behavioural Science at the Saïd Business School. He is also an editor of the World Happiness Report. His research in the field of wellbeing science has led to new insights in the relationship between happiness and income, productivity, economic growth, and inequality.

George Ward is the Mary Ewart Junior Research Fellow in Economics at Somerville College, University of Oxford and the Persol Research Fellow at the Wellbeing Research Centre, University of Oxford. He obtained a PhD from the Massachusetts Institute of Technology (MIT)’s Sloan School of Management in 2022. His research focuses on various markers of employee wellbeing such as happiness, satisfaction, stress, and purpose. He is particularly interested in the future of work and in how we might design jobs that work for people’s wellbeing.