Does Employee Happiness Have an Impact on Productivity?

Clément S. Bellet (), Jan-Emmanuel De Neve () and George Ward ()
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Clément S. Bellet: Erasmus School of Economics, Erasmus University Rotterdam, 3062 Rotterdam, Netherlands
Jan-Emmanuel De Neve: Saïd Business School, University of Oxford, Oxford OX1 1HP, United Kingdom
George Ward: Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142

Management Science, 2024, vol. 70, issue 3, 1656-1679

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—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.

Keywords: happiness; mood; productivity; sales performance; natural experiment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:3:p:1656-1679

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