Does employee happiness have an impact on productivity?

Bellet, Clément S., De Neve, Jan-Emmanuel and Ward, George (2019) Does employee happiness have an impact on productivity? CEP Discussion Papers (CEPDP1655). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

This article provides quasi-experimental evidence on the relationship between employee happiness and productivity in the field. We study the universe of call center sales workers at British Telecom (BT), one of the United Kingdom's largest private employers. We measure their happiness over a 6 month period using a novel weekly survey instrument, and link these reports with highly detailed administrative data on workplace behaviors and various measures of employee performance. Exploiting exogenous variation in employee happiness arising from weather shocks local to each of the 11 call centers, we document a strong causal effect of worker happiness on sales. This is driven by employees working more effectively on the intensive margin by making more calls per hour, adhering more closely to their workflow schedule, and converting more calls into sales when they are happier. In our restrictive setting, we find no effects on the extensive margin of happiness on various measures of high-frequency labor supply such as attendance and break-taking.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2020 The Authors
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics I - Health, Education, and Welfare > I3 - Welfare and Poverty > I31 - General Welfare; Basic Needs; Living Standards; Quality of Life; Happiness D - Microeconomics > D0 - General > D00 - General
Date Deposited:	16 Feb 2020 17:30
Last Modified:	14 Sep 2024 04:08
URI:	http://eprints.lse.ac.uk/id/eprint/103428

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