Does Employee Happiness have an Impact on Productivity?

59 Pages Posted: 17 Oct 2019 Last revised: 10 Nov 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 evidence from a natural experiment on the relationship between employee affect and productivity. We link highly detailed administrative data on the performance of all telesales workers at British Telecom with survey reports of employee happiness we collected on a weekly basis. We make use of the interaction between a worker’s access to windows while at work and the presence of gloomy or bright weather outside of each call center, in order to derive quasi-experimental estimates for the causal effect of happiness on productivity. We find a strong effect of happiness on sales. This effect is driven by changes in labor productivity – largely through workers converting more calls into sales, and to a lesser extent by making more calls per hour and adhering more closely to their schedule. We find no effects 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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