Does Employee Happiness have an Impact on Productivity?

45 Pages Posted: 17 Oct 2019 Last revised: 10 Feb 2020

See all articles by Clement Bellet

Clement Bellet

Erasmus University Rotterdam (EUR)

Jan‐Emmanuel De Neve

University of Oxford

George Ward

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: October 14, 2019

Abstract

This article provides quasi-experimental evidence on the relationship between employee happiness and productivity in the field. We study the universe of call center sales workers at British Telecom (BT), one of the United Kingdom’s largest private employers. We measure their happiness over a 6 month period using a novel weekly survey instrument, and link these reports with highly detailed administrative data on workplace behaviors and various measures of employee performance. Exploiting exogenous variation in employee happiness arising from weather shocks local to each of the 11 call centers, we document a strong causal effect of worker happiness on sales. This is driven by employees working more effectively on the intensive margin by making more calls per hour, adhering more closely to their workflow schedule, and converting more calls into sales when they are happier. In our restrictive setting, we fin no effects on the extensive margin of happiness on various measures of high-frequency labor supply such as attendance and break-taking.

JEL Classification: JEL, D03, J24, M5, I31

Suggested Citation

Bellet, Clement and De Neve, Jan-Emmanuel and Ward, George, Does Employee Happiness have an Impact on Productivity? (October 14, 2019). Saïd Business School WP 2019-13, Available at SSRN: https://ssrn.com/abstract=3470734 or http://dx.doi.org/10.2139/ssrn.3470734

Clement Bellet (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Jan-Emmanuel De Neve

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

George Ward

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
Cambridge, MA 02142
United States

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