How Leaders Impact Employee Happiness At Work

By Terri Lyon

Updated Over a Week Ago

Minute Read

Employee happiness has a huge impact on performance and absenteeism and fosters more loyalty to the company. Well, mostly. As is typical with anything related to humans, there are no easy answers. But leaders most definitely impact employees’ happiness.

What can leaders learn from happiness research? You may be surprised.

The Roots of Employee Happiness

I’m lucky to have taught at the college level for almost 40 years, and am currently in the Industrial and Organizational Psychology program at Walden University. One of my favorite exercises is the ‘Roots of Happiness.’ I created this exercise from the textbook Psychology Applied to Modern Life: Adjustment in the 21st Century by Weiten, Dunn, and Yost Hammer.

The authors discuss the fascinating research on the relationship between 14 factors and happiness: money, age, relationship satisfaction, personality, culture, religion, gender, health, social relations, work, intelligence, physical attractiveness, leisure activities, and parenthood.

I created a checklist and asked my students to pick the top 3 factors related to happiness. The results are mixed.

The factors students pick most often – like money, age, and parenthood – are not related to happiness.

Getting a raise sounds like it would improve happiness, right? But that is not the case. Money has no relationship to happiness above the poverty level. Obviously, fair compensation is essential, but don’t expect raises to impact happiness long-term.

Personality, relationship satisfaction, and work are the three factors most related to happiness. Your personality, prioritizing a loving relationship, and finding your purpose in meaningful work are the most important factors for happiness.

Personality and Happiness

Personality is stable throughout life, and if you tend to be a happy person, you will likely stay that way. Shy? That probably won’t change much. The implication for leaders is that understanding their employees’ personalities is essential; trying to change them is a lost cause.

Personality is stable throughout life, and if you tend to be a happy person, you will likely stay that way. Shy? That probably won’t change much. The implication for leaders is that understanding your employees’ personalities is essential; trying to change them is a lost cause.

Relationships and Happiness

Students often guess this one. It is not a surprise that a loving relationship is related to happiness. Married people or those in a committed relationship are happier than single or divorced.

Work and Happiness

Yes, work is more related to happiness than most students’ factors in the ‘Roots of Happiness’ exercise. More than money or parenthood, or age.

No one chooses work as one of the top three. Even my organizational behavior and leadership students never select work.

What does that say about people’s perceptions of work? Apparently, most do not see the workplace as a source of happiness.

But everyone wants to be a productive member of society. And in my experience, new employees are eager to contribute to the organization’s work. As leaders, we need to ensure they have what they need to do so. Leaders can make a difference in the lives of their employees by helping them get the most out of their job.

The Impact of Work

We spend the majority of our time working for pay. The aspects of earning a living and its associated benefits impact our happiness indirectly. First, by being able to pay our bills and receive other benefits. And also indirectly through the way a person feels about themselves because of their work. Perhaps their work brings them prestige. Maybe they enjoy greater self-esteem because of their career. Or perhaps they simply enjoy doing the work itself.

Work is central to most people’s identities. When asked a general question, “What do you do”? Most people respond with their job titles. Moreover, across many languages, a significant number of people’s surnames are based on occupations (e.g., in English, to name a few: abbot, archer, baker, barber, barker, brewer, carpenter, carter, Clark, collier, cook, cooper, farmer, fisher, fowler, goldsmith, hooper, mason, miller, porter, roper, sawyer, smith, tailor, thatcher, turner, weaver, wright) Judge and Klinger, 2008, p. 393.)

Does Your Organization Care about Employee Happiness?

Do organizations really care about employee happiness? You do, of course, since you would not be reading this article if helping employees was not a goal. But is that true for your organization?

Although Google has a Chief Happiness Officer, most organizations do not focus on happiness. Researchers Judge and Church surveyed Human Resource practitioners and found that employee job satisfaction is rarely a part of an organization’s mission and values. In fact, it was not a focus at all in many organizations. (“Do you focus on job satisfaction?” might be an excellent question to ask an organization if you apply for a job.)

An organization that cares about all its stakeholders – including employees – performs better. So upper management must ensure a safe and healthy work environment, fair compensation, and ethical policies.

Most leaders don’t have responsibilities for organizational policies, compensation, ethics, and other organization-wide initiatives. But they can still impact employee happiness.

Leaders Can Make a Difference

Leaders have many avenues to impact happiness, primarily through aspects of the job itself and the work environment.

Job Satisfaction

Researchers Hackman and Oldham pioneered one of the most fruitful research areas related to happiness. They found that specific ways of structuring a job provide satisfaction. Employees who experience meaningfulness, responsibility, and knowledge of results are more satisfied.

Consider the difference between these two jobs:

Martha’s Job

Woman working on computer

Martha’s job is to check loan documents for adherence to legal requirements. Using a checklist, she goes line by line. If everything meets legal requirements, she logs into her dashboard and marks it as ready for the next person.

If something is wrong, she completes a form and sends it back to the person who handles applications. It is tedious work without face-to-face interaction with clients or other employees.

Jane’s Job

Positive Happy Job

Jane’s job is as a credit union loan officer. She receives loan applications and then schedules a face-to-face meeting with the client to discuss their goals, verify the information, and discuss loan options and rates.

Jane enjoys hearing about how the clients are changing their lives with a new house, an addition to a new baby, or funding for higher education. After completing the application and verifying that she has complied with all financial and legal requirements, she sends it for disbursement.

Sometimes it is a large loan or has extenuating circumstances. In that case, she walks it to the loan manager for approval. Then her favorite part: she gets to give the clients the good news that their lives will change.

Jane’s job is meaningful, allows autonomy, and she knows when she is performing correctly. On the other hand, Martha’s job does not have the same sense of meaningfulness because she doesn’t know the clients or why the loans are important to them. She follows strict protocols without the ability to be flexible.

Finally, she does not hear back if she is doing the job right but receives demerits if she misses an essential item on her checklist.


  1. Allow employees to do a variety of tasks.
  2. Let them do an entire task from beginning to end. Understand your employees’ skills and help them apply their talents to their work. If they need development, provide them with training, coaching, or mentoring.
  3. And if they cannot do the entire task, make sure they understand the scope of the work from start to finish and how they fit into the process.
  4. Help them recognize that their work is essential and makes a difference in people’s lives. Be specific about why.


  1. Let employees have personal control over how they do the work.
  2. Give them input into decisions where that is appropriate.


  1. Feedback directly from the job is the best kind because it is immediate, precise, and impersonal. Set up the job to give employees feedback on their performance as they do their work.
  2. Leaders should also provide feedback. Deliver an appraisal that is clear, timely, and useful.
  3. Help the employee set moderately difficult goals and provide helpful feedback on goal completion.

The Work Environment

Leaders may have less control over the work environment than they do with the jobs they manage. So even if a leader structures a job with meaning, autonomy, and feedback, other factors can get in the way of job satisfaction.

Provide the tools necessary for the job and remove obstacles to good performance. This seems obvious, but check in with your employees to ensure they have what they need.

Years ago, when I was managing a training organization, I got a request from a department for German lessons. Intrigued, I asked a few questions about why they needed to know another language. It seemed one of their new pieces of equipment had arrived with a manual in German. That is an obstacle to good performance, for sure, but training wasn’t the best answer. I simply called the manufacturer and ordered manuals in English.

Make sure good performance is rewarded and poor performance is not rewarded. You may be surprised by the number of ways performance consequences are upside-down. Did you do a fabulous job with your presentation at a career fair? The reward: more presentations at career fairs. And the ones that gave bad presentations get to do something else.

Make a Difference

Helping employees find meaningfulness, autonomy, and contribution through work is a way that you can make a difference in your employees’ lives.

And consider that people also get similar satisfaction from volunteering. Find ways to support employee volunteering in the community. Even if you can’t impact their work, you can help them find joy by making a difference for others.

How Do You Impact Employee Happiness with Your Team?

If you have ideas about employee happiness that might be helpful to readers, share them in the comments section below. Thanks!

Would you like to contribute a post?

Terri Lyon on FacebookTerri Lyon on LinkedinTerri Lyon on Twitter
Terri Lyon
Terri Lyon
Through her website Life At The Intersection, Terri Lyon spotlights the unique, creative, and sometimes surprising ways people make change happen through their activism. A licensed psychologist, her career experience includes government research, managing training at a Fortune 500 company, consulting, and almost 40 years teaching graduate students. She is the treasurer of a credit union and a professional arbitrator for the Better Business Bureau.
  • Employees should feel confident enough to share any job concerns with employers without feeling marginalized, stigmatized and as a threat.
    Employers and Leaders should have the attitude of openness to listen to compliments and criticism from employees, and seek ways to improve the communication line.
    An employee who feels confident that they can be honest in sharing their opinions on how to improve their job, is an employee who will put their best foot forward to safeguard the organization.

  • {"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}
    Brilliant Leadership Logo

    Improve Yourself & Your Team

    Get The Training Proven By 40,000+ Leaders