Does Employee Happiness have an Impact on Productivity?

61 Pages Posted: 17 Oct 2019 Last revised: 27 Oct 2022

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 paper provides evidence from a natural experiment on the relationship between positive affect and productivity. We link highly detailed administrative data on the behaviors and performance of all telesales workers at a large telecommunications company with survey reports of employee happiness that we collected on a weekly basis. We use variation in worker mood arising from visual exposure to weather—the interaction between call center architecture and outdoor weather conditions—in order to provide a quasi-experimental test of the effect of happiness on productivity. We find evidence of a positive impact on sales performance, which 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 evidence in our setting of effects on 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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