How to build a happy workplace

Happy employees in a meeting

Seven ways to cultivate a more engaged team—and a healthier bottom line

Building a successful firm is easier with happy employees. That's because happy employees are more engaged, and research shows engagement is good for the bottom line. In fact, companies with the best staff engagement are nearly twice as likely to be successful based on metrics such as financial results, customer satisfaction, and employee retention, according to a study by Gallup.

But building a happy, engaged workforce isn't easy. Just 33% of U.S. employees are engaged at work—well below the 70% engagement rate at the world's best companies.

Whether a company is large or small, the smartest way to improve workforce engagement is by cultivating and supporting employees, says Dr. Ken Harmon, an academic and consultant who has made it his mission to help companies bring more happiness into the workplace. In addition to teaching MBA students at Kennesaw State University, Harmon draws on his personal experiences as an entrepreneur and as an auditor with PricewaterhouseCoopers.

To boost your organization's workplace happiness, Harmon recommends these seven practices:

1) Be flexible. Leaders often make the mistake of micromanaging their teams. Instead, says Harmon, trust that your team will get its work done. Giving employees latitude over when they complete their work can have a happy ripple effect throughout their lives, giving them more flexibility to make it to a kid's soccer game or to drive an aging parent to a doctor's appointment. More than half of employees say managing their work/life balance is one of the top five things their employers can do to help them be successful at their jobs. "Measure output, not input," says Harmon. "I don't care when you get it done, just get it done."

2) Embrace the whole person. The individuality of your employees is an asset, not a detractor, says Harmon. He suggests leaders should encourage team members to share their unique points of view. After all, a team of people with different life experiences and perspectives gives you a powerful dose of diversification. And research shows that companies with strong gender and ethnic/cultural diversity are more likely to have better-than-average financial results.

"The person you hired has had life experiences and that's what brought them to be who they are. You love who they are, and that's why you hired them."
—Ken Harmon

Also encourage team members to build connections with co-workers. Harmon notes that encouraging interaction among employees—whether informally in the break room or formally in a team-building workshop—can contribute to greater happiness and productivity. "People want to be connected to other people," he said. "Wherever people get that, let them do it."

3) Understand the role of money. Too often, leaders think doling out pay raises will lead to a sharp bump in productivity. But research shows that productivity and higher pay aren't always correlated. Harmon suggests using pay raises or bonuses as ways to express gratitude for what people have already done, not as carrots to get them to do more. And bonuses don't have to be big: You might actually be better off giving team members smaller bonuses several times a year rather than larger bonuses once a year. More-frequent rewards may provide a steady stream of positive reinforcement that keeps an employee engaged.

4) Hire happy people. It's easier to build a happy workplace if you start with happy people. Hire someone with the right attitude, and their enthusiasm can be contagious—but a bad attitude from even the most talented employee can be corrosive. "Attitude is everything," says Harmon. He suggests considering attitude as well as aptitude during the hiring process, because skills can be taught.

5) Be the surgeon. Think of your company like a living, breathing organism. If there's a cancer threatening the health of that organism, you're the surgeon holding the scalpel. You may have to cut a weak-performing product line, reorganize departments, or fire an employee whose bad attitude is infecting the rest of the team. You may also have to deliver some hard truths to employees, whether about subpar performance or challenging interpersonal interactions. Don't sugarcoat those truths, says Harmon, but do it with kindness. "I've seen situations where people allow stuff to go on too long and it becomes a negative factor," he says. "Be strong, be the leader and be kind. Those are not in opposition."

"Be stable. It doesn't mean you don't get mad, it doesn't mean you don't have passion, but you're in control. People are looking to you to be a stabilizing force."
—Ken Harmon

6) Just be nice. Nice guys finish last, right? Not always. Harmon says that in the corporate world, being nice doesn't necessarily mean giving up control or losing respect from your team. And recognizing or praising employees for good work can yield big benefits, including boosting work quality and reducing absenteeism. What's more, workers who don't feel like their good work is noticed are twice as likely to say they'll quit in the next 12 months.

"When you show up as a leader at work, you need to truly care about every one of those people who is in there. I mean, really care. If you don't, there's a problem. If you do, it goes far."
—Ken Harmon

7) Trust your team. Great leaders understand happiness and lead through trust, stability and hope. They also practice forgiveness and compassion. When problems arise, Harmon suggests using them as opportunities to address organizational issues rather than assign blame. And he says leaders should strive to create an environment that allows for mistakes rather than punishing them. "If somebody's hovering over me, going, 'You better not make a mistake, or else,' I'm tense," says Harmon. "I don't perform my best."

Happiness matters, even if it sometimes seems difficult to map its impact on your metrics or the balance sheet. Harmon's guidance offers you a roadmap toward a happier, more engaged staff. Follow it and observe the effect on your team, your clients, and yourself. You may find yourself agreeing with Harmon, who says "culture eats strategy for breakfast."

Bonus secret from Ken Harmon

Good leadership spreads throughout the workplace. The compassion, kindness, flexibility and trust you show to your team will be shared, helping to build a stronger, more durable culture. The culture can extend to clients, too. One way to make the process easier is to focus on your own happiness. Doing that can be simple, says Harmon: It starts by just saying "thank you." Try to be genuinely grateful to the people in your life, and express your thanks aloud as much as possible. After a while, gratitude will feel natural. "You just wake up and you end up being happier, because you just look at things differently," says Harmon. "There's your secret."

Contributor bio

Dr. Ken Harmon is an executive coach, motivational speaker, consultant, and founder of Harmon Consulting. Much of his work focuses on the research of happiness and how the results can be deployed to help people's personal and working lives. He is also a professor of accounting at Kennesaw State University, where he served as dean of the Coles College of Business. Dr. Harmon has bachelors and master's degrees in accounting and a doctor of business administration degree in accounting from the Haslam College of Business at the University of Tennessee.


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1 Gallup, “State of the American Workplace,“ 2017
2 Ibid.
3 Mercer, “Global Talent Trends,“ 2019
4 McKinsey, Delivering Through Diversity,” January 2018
5 Economic Policy Institute, “The Productivity-Pay Gap,” July 2019
6 Gallup, State of the American Workplace,“ 2017

Based on “The Happiness Factor: Making Your Personal and Work Lives Better,” presented by Dr. Ken Harmon at Schwab’s IMPACT® conference in San Diego, CA, October 2019.