Does employee happiness have an impact on productivity?

Journal article

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 leverage variation in a worker’s visual exposure to weather while at work in order to derive quasi-experimental estimates for the causal effect of happiness on productivity. We find a strong effect of happiness 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.

Authors: Bellet, C; De Neve, J-E; Ward, G

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: INFORMS
• Journal: Management Science
• Volume: 70
• Issue: 3
• Pages: 1656-1679
• Publication date: 2023-05-11
• Acceptance date: 2022-08-21
• DOI: 10.1287/mnsc.2023.4766
• EISSN: 1526-5501
• ISSN: 0025-1909
• Language: English
• Keywords: FFR