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What really drives employees’ happiness?

For those who who prefer pictures to words, check out the infographic below this post.

In a culture dominated by money, we often forget that a job can provide many different kinds of benefits to people, from friendship to influence to intellectual stimulation.  Money is only one of many motivators, and some would argue it’s one that does a poorer job of buying happiness than we realize.

Recently we ran a simple study to see how different employee motivators stack up. Embedded among other questions, we asked 584 employed Americans from a variety of jobs and industries how satisfied they were in their jobs and how happy they were in their lives.  We also asked these same folks the degree to which seven different things were important to them and how much they received each of these from their jobs.

The contenders, organized by how important employees said they were:

  1. Security (3.76/5)
  2. Work-Life Balance (3.72/5)
  3. Intellectual Stimulation (3.54/5)
  4. Money (3.22/5)
  5. Achievement/Prestige (3.21/5)
  6. Affiliation/Friendship (2.94/5)
  7. Power/Influence (2.58/5)

Today we’ll answer a related but different question: How important do these actually turn out to be for job satisfaction and employee happiness? For this, we can look at the statistical relationship between these key outcomes and how much of each motivator people receive from their jobs.  In the chart below, these relationships are plotted, based on “squared correlations,” which essentially tell us the percent of one variable accounted for by the other.  In other words, what percent of an employee’s happiness and satisfaction are accounted for by money, intellectual stimulation, etc.?

On the Job Motivator How much of a person’s Job Satisfaction does it account for? How much of a person’s Overall Happiness does it account for?
Intellectual Stimulation 18.5%*** (WINNER) 8.6%*** (WINNER)
Achievement/Prestige 18.4%*** (2nd) 4.3%*** (3rd)
Power/Influence 14.9%*** (3rd) 6.9%*** (2nd)
Security 8.8%*** (4th) 4.0%*** (4th)
Work-Life Balance 8.0%*** (5th) 3.8%*** (5th)
Affiliation/Friendship 5.9%*** (6th) 3.8%*** (6th)
Money 5.4%*** (LAST) 2.6%*** (LAST)

These numbers look quite different from what employees said was important to their happiness.

A few things to notice:

  • Some of these things mattered more than others, but all of them mattered.
  • The “winners” aren’t necessarily what you might have guessed.  Things that make jobs more stimulating, such as task variety, tended to be the most powerful drivers of one’s job satisfaction and even employee happiness away from work.
  • Security and Work-Life Balance—the things employees reported were most important to them—are right in the center (4th and 5th) in terms of their actual prediction of happiness and satisfaction.  These things matter, but maybe not quite as much as people think.
  • As much as we may think getting that raise will make us happy, money was the single weakest predictor of both job satisfaction and overall employee happiness.
  • The amount of power one holds at work is something employees don’t think matters very much. (It was rated, far and away, as the least important motivator.)  But your employees may not know themselves as well as they think.  In actuality, the amount of power and influence one holds at work was second only to intellectual stimulation in terms of predicting one’s overall happiness in life.

If you’re anything like me, when you want to know what matters to someone, you probably just ask them.  From that perspective, these results seem a little bit disheartening.  Do employees even really know what drives their happiness? And if they don’t, does it even help to ask them?

But before concluding that it doesn’t, we should look at the numbers a bit more closely.  Averages aside, if a person reports that a factor is more important to her, will she also respond more strongly to it?

To help visualize this, we divided the sample into two groups (high and low) for each of the “importance” questions.  If employees are able to accurately assess how much a particular motivator matters to them, then for those that say it matters more, the effect of it on their job satisfaction should be higher.  Is this the case?

On the Job Motivator Influence on Job Satisfaction among those who rated the motivator as LESS important. Influence on Job Satisfaction among those who rated the motivator as MORE important.
Intellectual Stimulation 7.6% 23.0%
Power/Influence 8.7% 19.7%
Achievement/Prestige 12.7% 27.8%
Security 3.3% 12.0%
Work-Life Balance 7.8% 9.0%
Friendship/Affiliation 0.4% 8.4%
Money 2.8% 11.6%

A cursory glance at the table above shows us that employees do know what drives their happiness, at least in regard to six of our seven motivational elements.  Those employees who reported that a particular motivator was more important to them also showed significantly higher relationships between the relevant factor and job satisfaction.  The only exception was work-life balance, which influenced job satisfaction to about the same degree regardless of whether one reported that it was important.  Though many people reported that having time for other things (vacations, hobbies, etc.) was not particularly important to them, actually having a bit of time outside of work was just as beneficial for them.

However, a closer look at the 2nd table also suggests that three of the other six motivators are so beneficial that they’re strongly driving employee happiness even for those that don’t care about them.  These are intellectual stimulation, power, and prestige. So basically if you want to have really happy employees try the following formula:

  • Offer employees extra money, security, and social opportunities. But only to the extent they say these things matter to them. (But of course, don’t forget that people always need a bit of these.)
  • Try to ensure that jobs provide intellectual stimulation and task variety.  Give your employees some autonomy and influence in their work.  And provide folks with opportunities to acquire prestige and recognition.  Give people these things if they don’t say they need them.  Give them even more if they say they do.
  • Give all your employees a break now and again, even the consummate workaholics who will tell you they don’t want or need it.

Cangrade_Employee_Hapiness Infographics

Infographic by Vadik Bakman