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Think Twice: Happiness May Be Overrated

August 15, 2002

Employee satisfaction, like turnover, traditionally has been a measuring cup of HR success. The pages of this Web site have over the years chronicled companies that have made employees happy and achieved business success -- Levi’s, Hewlett-Packard, SAS, First USA Bank, and the Dallas Mavericks, to name a few.

You, too, likely have spent a lot of time and money designing satisfaction surveys, conducting the surveys, analyzing reports, and trying to increase the number of employees who say they are very satisfied at work. If you’re fighting to increase employee satisfaction to 100 percent, here’s some advice: Don’t. It may be a bigger waste of time than Gary Condit’s re-election campaign.

Employee satisfaction does not guarantee success. In fact, it may not mean much at all.

Judith Bardwick, who teaches at the University of California, San Diego, says that “happiness is an ephemeral emotion, too fleeting to have an impact.”

In other words, if an employee tells you he’s happy, it’s about as significant as the employee saying he’s hungry. Five minutes and three chicken tacos later, he’s full.

We humans are fickle.

Some people, believe it or not, even claim it’s possible for employees to be too happy. Theresa Welbourne is one. She’s convinced that complacent employees can be a drag on companies. She even claims that very high satisfaction rates are associated with low stock prices.

Welbourne was an HR professional before getting her Ph.D. in business at the University of Colorado in 1992. She spent her time in graduate school gathering data on company performance, something she still does as CEO of the survey firm eePulse.

“People who are satisfied with their jobs are not necessarily higher performers,” Welbourne says. “In fact, they might be mediocre.”

The most important reason that satisfaction is such a bad barometer of company success is that for any company to be successful in today’s business environment, it has to continuously change, Welbourne says. To change, you have to convince yourself that you’re dissatisfied with something. If employees feel like everything’s just hunky-dory, there’s no reason for them to want to do things differently.

Welbourne issues this warning to employers whose goal is 100 percent satisfaction: “If everybody’s happy and content with the way things are, your company is going to go down the tubes.”

Better check those survey results again.

If you’re thinking that Welbourne must be a heartless HR scrooge, think again. She’s not alone. George Klemp, a management consultant in Boston who helps large corporations design surveys, reminds us that today’s compassion is tomorrow’s near-bankruptcy.

Klemp says employees at Digital Equipment Corporation, a computer manufacturing and service company, were plenty happy when the company was awash in great work/life benefits, as well as extensive organizational-development programs to help people work together effectively. Digital’s employee surveys, which were run by Gallup and were called Renew94, weren’t even renewed for 1995. The company sank and was bought by Compaq in 1998.

He also cites Mobil. For decades, the oil giant was surveying the dickens out of its workforce. Some Mobil employees would say they were unhappy, yet they’d stick around. Others would say they were happy, but suddenly leave. Happiness just did not correlate with employee decision-making.

Mobil was trying to move more women and minorities up the ranks, but they’d quit before they got there. In the mid-1980s, the corporation stopped asking people if they were satisfied. Instead, it asked people things like “Is your job interesting? Is it a stepping-stone to advancing your aspirations?”

Bingo. These kinds of questions can predict behavior.

None of these gurus claim -- nor do I -- that you should try to make your employees miserable. Bardwick agrees that if you’ve created an environment in which employees are worried sick that they’re going to get laid off or fired, they’re not going to perform well.

Employees should have some degree of satisfaction with their jobs. Equally important, they should be energized, motivated, and eager to try something new. This is especially true for salespeople, upper management, creative employees, and individuals in other positions that demand a lot of energy. You might not want your accountant so eager for change that she decides to create a new kind of balance sheet.

Your balance sheet is probably fine, especially if your employees are relatively content, but agitated enough to keep up with today’s pace and need for change.


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