What makes happy employees?

By Ed Cohen | Fall 2012

Printer Friendly

If you are at this moment trying to keep from sliding down a surface set at something like 45 degrees, are clutching a nail gun and have on knee pads, are sweating profusely (and reading this magazine, let’s not forget) your answer to the question of “What makes happy employees?” is likely to be, “Not this.”

And you’d have research to back you up.

In 2006, a survey by the University of Chicago’s National Opinion Research Center compared the job satisfaction and general happiness levels reported by U.S. workers in 198 occupations. Roofers were found to be the least satisfied with their jobs, and they finished second-to-last in general happiness, beating out only a legion of disgruntled garage and service-station attendants.

Which jobs were found to be the most satisfying and have the happiest people? Clergy and firefighters finished at or near the top of both lists.

What the survey didn’t tell us is what makes people happy at work. Is it the work or the people, some combination of the two or something else entirely?

Social scientists have long sought to answer that question, and businesses are understandably curious, too. In a 2010 Gallup study, Chief Scientist James K. Harter and colleagues found that poor employee attitudes and perceptions of work conditions result in lower sales, profits and other bottom-line considerations. Another Gallup study found that U.S. businesses lose about $300 billion a year as a result of disengaged employees being unreliable and less productive.

Employee unhappiness has an additional, darker cost, says Bob Bretz, Mendoza College’s Joe and Jane Giovanini Professor of Management. Humans and higher-level primates, he says, are the only creatures who will take out their frustrations on their own species. “If you’re mean to a dog, it doesn’t go out and bite another dog.” But people who experience abuse at work often take out their frustration on subordinates or peers, and in some cases have been found to be more likely to abuse a spouse or children at home.

Knowing about that spillover, Bretz says, business schools have a “moral and ethical imperative” to train managers who can help reap profits without crushing their employees’ souls. Bretz, whose research has been published in such journals as Personnel Psychology, the Journal of Applied Psychology and the Journal of Management, is so passionate about this responsibility that when he served as management department chair from 1998-2009 he coined a slogan to capture the department’s mission and had it printed on coffee mugs: “Improving the human condition at work.”

Whether you’re trying to improve the human condition or profitability or, ideally, both, it’s worth knowing what makes happy employees.

It should come as no surprise that, as with any human emotion, research has found no single cause or a one-size-fits-all explanation.


A mountain of evidence suggests that we are born with our personalities. Some people are simply more inclined toward happiness than others, at work and everywhere else. 

“The (genetic effects) are as important as everything else put together,” declares Timothy Judge, Mendoza’s Franklin D. Schurz Professor of Management, who earlier this year co-authored a piece about genetic influences on job satisfaction, stress and other outcomes in the journal
Organizational Behavior and Human Decision Processes.

Judge has devoted most of his career to studying how personality traits relate to workplace success. He, Bretz and many other psychologists are convinced that personality is inherited. Their evidence: studies of identical twins separated at birth. In case after case, the genetically identical sibling turns out to have the same personality, despite having grown up in different circumstances. 

Bretz says people may not emerge from the womb with their personality fully formed, but nurture has a relatively brief window of opportunity to shape what nature has supplied.

“By the time you’re 10,” he says, “you’re pretty much who you’re going to be.”

Other evidence that one’s baseline of happiness is hard-wired comes from studies of people who have experienced major life changes associated with increased happiness, such as winning the lottery or getting married. The person’s happiness starts out at a certain level before the happy event and increases in anticipation of it (if the event can be anticipated). The happiness high endures for a while, but then people return to their former level—what psychologists term their life-satisfaction “set point.” 

Judge says certain inherited personality traits are common among happy employees. The big three are emotional stability (the tendency to look at life as a glass half-full); extraversion and conscientiousness (people who are very dutiful, organized and plan ahead). If you’re looking to improve your odds of hiring happy employees, he says, a good strategy would be to test for those traits. 

Of course, no organization has the luxury of hiring only people who are so genetically predisposed to happiness that they’ll do any job (and do it well) with a smile. There is an alternative, Judge says: Match personalities to jobs. The better a person’s genetically dictated, unchangeable personality fits the job, the more likely they are to be happy and good at it.


If you feel like your employer does important work and that your work is important to the company’s success, you’re likely to enjoy a deep sense of meaning and purpose. That makes most people happy. 

Matt Bloom, associate professor of management, is conducting a five-year study, funded by the Lilly Foundation, of the well-being of people in the caring professions—clergy in particular. In line with Bloom’s investigation, the National Opinion Research Center’s survey found professionals involved in helping or serving people—including firefighters, physical therapists and special-education teachers along with clergy—to be among the workers most satisfied with their jobs and happiest in general. 

Bloom, who has written about intrinsic motivation for the book series Research in Personnel and Human Resource Management, says caring-profession work isn’t always what one would objectively describe as “fun” or “enjoyable” (think aid workers deployed to an area devastated by a tsunami). But something about helping people or contributing to a cause one believes in makes unpleasant work satisfying.

Bloom and Ante Glavas, assistant professor of management, conducted a study of dairy-farm workers in which the farms converted to more sustainable practices aimed at reducing the amount of methane emitted by cows and manure. The gas was captured and used to help power the farm. Glavas says the study found that worker performance on such farms improved by as much as 40 percent.

“We’re finding that people who work for green companies have a pride-in-ownership mentality and are happier and more productive,” he says. “[S]ustainability’s greatest impact could, in fact, be on employees."


This one is complicated.

Research by Princeton economist Angus Deaton, Nobel-prize-winning psychologist Daniel Kahneman and others shows that once you make enough income so that you no longer worry about being able to pay the mortgage each month and you can afford a vacation occasionally, you’re likely to be solidly middle class and, thereby, happy.

Being financially “comfortable” is key, apparently. It may explain why creative—but typically not well paid—professionals like sculptors and authors made the opinion research center’s top 10 for job satisfaction but not for general happiness.

 The center’s study also found that job satisfaction tends to increase with the prestige or social standing of an occupation, and income often tracks prestige. For instance, 33.6 percent of people in unskilled and entry-level occupations were found to be very satisfied with their jobs, but the rate jumped to 55.8 percent among professionals and others in the highest-prestige jobs.

In dollar terms, Deaton, Kahneman, Harvard psychology researcher Daniel Gilbert and others put the happiness sweet spot at around $70,000 to $75,000 for an individual in the United States. After that, apparently, it’s a matter of diminishing returns. A person making $80,000 isn’t much happier than someone making $70,000.

Judge, who published a statistical analysis of experiments and studies into the relationship between pay and job satisfaction in the Journal of Business and Psychology, says pay has actually been found to be a “weak predictor” of job satisfaction. Early in his career he conducted a study comparing the job satisfaction of family-practice physicians with that of surgeons. He found that the surgeons were no happier, even though they made much more money.

Bretz mentions psychologist Frederick Hertzberg’s Two-Factor Model of job satisfaction, which holds that pay is not a motivator, but rather what Hertzberg referred to as a “hygiene.” Just as bathing keeps one presentable but not necessarily attractive, receiving a fair amount for one’s work doesn’t make employees love their jobs, Bretz says. It merely keeps them from resenting their employers, and makes it possible for satisfaction to emerge if the job conditions are right.

Bretz says big money can actually lead to diminished happiness. For the typical business person to make a salary of, say, $300,000, it’s going to require long hours of work, extensive travel and endless meetings, he says. Research shows that as income rises, people report spending less time participating in activities they enjoy more than work, such as interacting with family, doing hobbies or in solitude.

Sometimes an obsession with money gets the better of us. In a study by Raj Raghunathan, a member of the marketing faculty at the University of Texas at Austin’s McCombs School of Business, people were asked to choose between two types of jobs, one of which they could easily identify as having the greater potential for producing happiness and being meaningful. Participants routinely chose the alternative, a more-stressful job with a higher salary.

The authors of the study speculated that it was because of greed and insecurity.


Judge says he must have conducted a hundred job-satisfaction studies. “And I’ve never found one where the intrinsic nature of the work itself wasn’t the most important predictor of overall job satisfaction.”

Intrinsic nature” means simply the job’s core responsibilities—is what you’re being paid to do something you find satisfying?

After interviewing thousands of people about their work, author Studs Terkel concluded that no job was universally loved or hated. This would seem to suggest that it’s futile to try to create jobs that people are going to find universally satisfying. But research suggests ways to improve the satisfaction odds.

Interesting, challenging work is easily the No. 1 factor in what makes an employee happy, says Management Professor Mike Crant, author of a chapter on personality and careers in the 2006 Encyclopedia of Career Development.

“People like to be appropriately challenged. Boredom is the worst thing that can happen at work,” he says.

Bretz says employees are more likely to be happy if their jobs impart feelings of “autonomy, purpose and mastery.” These characteristics are consistent with the Hackman-Oldham Job Characteristics Model, generally accepted as the gold standard approach to job design. The model suggests that autonomy, skill variety, task identity (the job has an identifiable start and end point and the employee can see that his or her contribution changed something), job significance (having meaning beyond the paycheck) and feedback create the cognitive and psychological processes necessary to promote higher levels of satisfaction and job performance at the same time. In other words, jobs designed using Hackman-Oldham create a situation where both the employee and the employer benefit.

Incidentally, the last factor, feedback, refers not to a supervisor’s critique but that the job itself tells the worker if he or she is doing it well. An example would be bricklaying. A mason can use instruments to tell if the wall the mason is building is constructed straight and true.

In case this is starting to sound like a checklist for the perfect job, beware projecting one’s own values. As Judge points out, thanks to in-born personality differences, not everyone values such ideals as autonomy and variety to the same extent. Some people choose a job precisely because it’s stable and predictable, what others might consider mind-numbing.

He says a certain person might frame the perfect job this way:

“It’s 8 to 5, and it’s no more than that, and that’s really important 
to me because I’ve got a lot of things in my non-work life that are even more important to me. I want a steady check. I want predictability. I want to know that my job is only a part of my life.”


Crant says the strongest predictor of happiness in life is having good social relationships. Having co-workers whose company you enjoy really matters, he says, especially in repetitive or mundane jobs.

Bloom mentions famously progressive employers such as Google and Zappos (an online shoe store) that provide free meals and paid memberships in organizations outside of work. He says they do this not just to show appreciation for their employees but to foster friendships at work.

“You’re spending a lot of time in [the work] environment,” Bloom says. “If you don’t have friends … it’s going to be a negative.”

Bretz says having a bad supervisor is the No. 1 reason people choose to leave an organization. But it’s wrong to assume that everyone wants a friend for a supervisor.

Judge uses a 360-degree-type survey to help students in his Executive MBA course discover how their employees rate them as leaders. The results consistently show that people appreciate having a leader who is a strong visionary more than they do an undemanding or considerate boss. Why? Judge says most people are smart enough to know that their fate depends on having someone in charge who can set the right priorities. Job security matters more than frequent pats on the back.


This is more of a consideration when deciding whether to join an organization.

Historically, Bretz says, management researchers believed that people chose a job—when the economy afforded them the luxury of choice—based on four factors: pay, type of work, opportunities for promotion and location.

Bretz’ research uncovered another key factor: people’s sense of how well their values and culture align with those of a prospective employer. Everyone knows a different culture exists at Apple than 
at IBM, Bretz says. His favorite example is the U.S. Marine Corps:

“Nobody is ambivalent when asked, ‘Would you have wanted to be a Marine?’” he says.

Having a distinctive and well-known culture helps attract employees who share the organization’s values and are therefore likely to be happier in these jobs than they would be in work environments that don’t support the expression of their core values. Case in point: Four of the top 25 organizations on the job-search website CareerBliss.com’s list of the “50 Happiest Companies for 2012” were the U.S. Air Force, Department of Defense, Navy and Marines. (Hilton Worldwide finished No. 1.)

The ratings were based on company reviews written for the website by employees, so the survey is hardly scientific. But the list was compiled from factors Mendoza’s management researchers would agree are key to overall happiness at work, including company culture, the work employees do, and the people they work with.