A simple model for happiness at work
A simple 3-step model shows what it takes to make a workplace happy, and it’s shown in the figure below.
The model has three layers, three areas which make a difference to people’s happiness at work. Each of these layers are important, but one is often ignored – and it happens to be the most important one.
The security level
In Alang in the Gujarat province of India a whole industry has grown around recycling old ships. You’ve probably seen the pictures. They take decomissioned oil tankers, cruise ships and freight ships and ground them on a beach. There’s not a shipyard in sight. Then an army of indians go to work tearing the ships apart – mostly by hand and with blowtorches.
The Gujarat Maritime Board sees this activity in a positive light:
Alang has emerged as one of the choicest ship-scrapping destinations for the ship owners around the world. Hundreds of ships from all over the world find their final resting place in Alang every year. There are 173 plots to carry out the ship-recycling activities. This activity forms an industry by itself, as it provides around 30,000 jobs in Alang itself and generates steel totaling to millions of tons every year. That too, with minimum consumption of electricity. If we examine these bare facts from the ecological point of view, it amounts to saving of huge amount of non-cyclic and precious mineral reserves like coal, petroleum etc.
But others are less positive:
Out of 361 workers, according to the survey … ten workers (2.77%) wear helmets, only one worker reported having gloves, two workers reported having shoes and three workers reported having welding glasses… 32 workers (8.62%) reported that they received some informal training, while the rest of them are untrained. Working hours are not decided. More than 50 percent of the workers reported that they work for between 8 and 12 hours.
Greenpeace describes the working conditions this way: Hundreds of people at the shipbreaking yards endure hard physical labour. They work in permanent danger. Steel plates and pieces fall off the ships. On board gasses cause fires and explosions. Many workers are injured or even killed by the physical hazards. Main causes of death are fire/explosion, hit by materials falling, falls, suffocation and inhaling CO2.
The shipbreaking workers are permanently exposed to toxic substances. They breathe toxic fumes and asbestos dust. Not only on the job, but also in the sleeping quarters nearby. One out of four Alang-workers is expected to contract cancer due to workplace poisons. This makes the industry amongst the most deadly in the world.
At the bottom of the model is the security level. This encompasses the most basic fundamentals of the happy workplace, and includes things like:
- Workplace safety – that you can go to work without being injured
- Workplace environment – light, temperature, sound, air quality, …
- Basic job security – security against unreasonable firing or abuse
- A fair salary – wages you can live on
- Mental workplace safety – that you won’t be bullied or harassed
- Overwork – that the company won’t try to work you to death
The items at this level are now solidly established in most modern countries. Often they are required by law, and are the result of years of negotiations between labor unions and business.
The shipbreaking industry in Alang is an example of workplaces that completely lack this basic security. Similar examples are almost impossible to find in more developed countries but are fairly common in developing nations, particularly China, India and Vietnam where industry is growing faster than regulation of that industry. In modern countries it’s more normal to find security problems related to the mental work environment. Bullying and harassment are rare but can be devastating when they occur.
When workplace security is not ensured it becomes difficult to be happy at work. How can you be happy when you’re worried you might be unfairly terminated, when you’re bullied or when you’re worried your job might make you ill. But it’s also important to notice, that even getting security just right, is not enough to make people happy at work. You can have a perfectly secure workplace and still find that few people are particularly happy, motivated or thrilled to come to work. Security makes happiness at work possible. It does not make people happy at work. That takes something else.
The perk level
It started with free M&M’s. Now there’s a country club, on-site Montessori daycare, on-site doctors and nurses, 35-hour work week, live piano music during lunch, 50.000 square foot fitness center, swimming pools, no dress-code, masseur, on-site car detailing and much more. If you need assistance in adopting a child or finding a college for your child or a nursing home for a parent, the company has people to help you with that too.
SAS Institute’s perks are legendary, and the Software Company’s 9.000 employees certainly know they have it good. Typical IT companies have employee turnover rates of 20%. At SAS it’s 3% which at a conservative estimate saves them $80 million a year in recruting costs alone.
Why do they do it? Are they naïve altruists? Not according to Jeff Chambers, SAS’ director of human resources: “No, we’re not altruistic by any stretch of the imagination. This is a for-profit business and we do all these things because it makes good business sense.
Their annual report for 2004 rightly brags about their 28th consecutive year of growth and prosperity, a record unmatched in the software industry. Their revenues in 2004 was $1.5 billion. That’s pretty impressive.”
Goodnight says it very simply: “If the employees are happy, they make the customers happy. If they make the customers happy, they make me happy.”
Slightly different from those beaches in India, huh?
At the top of the model, we find many of the perks that modern corporations are already offering their people, including:
- A high salary
- Pensions – partly financed by the employer
- Goodies – free coffee, good, cheap food, free snacks, etc…
- Dental/medical insurance – in countries where this is not supplied by the state
- The annual office party – a nice tradition
- Bonuses – depending on individual or company performance
And the truth is that perks work. But only when they’re done right.
The undisputed heavyweight world champion of perks is of course SAS Institute, who have the most extensive list of perks in existence. And it works for SAS, whose employees are happy and stay at the company for years doing good, creative work. But that’s not because of the perks – because no amount of perks can make up for lousy leadership, a bad atmosphere or a lack of respect for employees.
The truth is this: The perks, combined with Goodnight’s and the company’s attitude, make people feel valued – and that’s what’s making them happy.
And that’s the truth of perks. When they’re done right and when the mood and the culture is otherwise good at the company they make people feel valued and that makes them happy at work.
When perks are used to try to motivate people in a corporate culture that is not basically happy, you get something else instead: You get entitlement. The perks themselves don’t really make people happy, they just serve to create a mood of “hey, we’re entitled to this”.
This is good news for companies that don’t have as much money in the bank as SAS. It’s not the (expensive) perks, it’s the commitment to your employees’ happiness that makes a difference. And that doesn’t take country clubs and Montessori schools, but can be done on a much tighter budget.
The security level and the perk level are well understood by almost all businesses and have long been the focus of attention. Most efforts to create a better workplace focus on those levels.
The choice layer
However, there is a third layer, a middle layer, which many businesses overlook. The bottom layer comprises the most basic workplace necessities. If these are not in place, very little happiness is possible. The top layer is about making people happy. Giving them something extra, to make them feel valued and good about their work.
The middle layer is the one that really makes a difference, and it’s about making people want to be happy at work. If people don’t want to be happy, there is no way you can make them. In the immortal words of Jack Stack, CEO of The Great Game of Business: “They gotta wanna. ‘Cause if they don’t wanna, they ain’t gonna.???
Have you ever heard a manager or executive say something like “Look, we’re doing so much for our people. We give them a good salary, a gym, child-care and much more – and they still complain. They’re still not motivated and energized???. That’s what happens when a company disregards the middle layer, and creates a workplace where people don’t want to be happy. In this case there is nothing you can do at the perk level. No matter how much money the company spends on perks, they still won’t be happy. Conversely, in a company where people truly want to be happy they’re almost impossible to rattle. No matter what happens they just keep on going with an unshakeable determination and motivation.
The main difference is this: When you address the perk layer, it’s about the company making the employees happy. When you address the choice layer, it’s about the employees making themselves and each other happy. And that is the path to sustainable happiness at work: When each individual is working alone and collectively to further that happiness.
So how can you address the middle layer? How can you create a workplace where people want to be happy. Well, there’s good news, bad news and good news. The good news is that where the perk layer is often quite expensive, addressing the middle layer need not be.
The bad news is that addressing the top layer is easy – it’s basically about spending money. Addressing the middle layer takes something more: It means that the company must truly care for it’s people. It requires more of it’s leaders as human beings.
The good news is that there are a number of simple, effective practices a company can employ to focus on the middle layer and create that mood. To make its people want to be happy. The next chapter identifies these six practices.