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Most HR managers already know that happier employees are more productive, but a working study proves that companies with happy employees have higher stock returns than the market average. The study by three professors from Wharton Business School and Warwick Business School analyzed the list of “100 Best Companies To Work For” and compared the employee happiness to the stock performance, finding that high performing companies have happier employees.

Now that’s one way to get the attention of the C-suite and board members and prove to them the importance of employee engagement. Once upper-level management is on board to have a conversation around employee happiness, the next step is figuring out what makes employees happy.

“Every organization needs to take a long, hard look at what makes their employees happy,” says Michael “Dr. Woody” Woodward, PhD in organizational psychology and founder of Human Capital Integrated. “The last thing you want to do is impose what you think makes people happy because from your corporate office you likely don’t have a good handle on it.”

Too often companies give employees what they think will make them happy, such as free lunches, gym access and other perks, but that’s a major mistake, Dr. Woody notes. Giving gifts and providing incentives that have no meaning will only cost the company more money and have limited return on employee happiness and therefore stock performance.

Don’t Assume, Ask

Instead of making assumptions, organizations should foster a culture of open dialogue by getting employee buy-in, asking them what they want and understanding how they do their jobs, Dr. Woody suggests. He even suggests that HR managers spend a day in the life of an employee to better understand what would make employees happier.

Dr. Woody adds, “Whether it’s the manufacturing floor, the retail floor or the delivery truck, go out to see and experience what it is your employees are going through on a daily basis, what it is they’re struggling with and what they need to be happy. Being happier at work could mean having the right tools and equipment, or being happier in their personal lives could mean having the time and things they need to provide for their families. Whatever it is, you have to ask the questions.”

Another mistake that companies can fall prey to is thinking that what makes one employee happy makes all employees happy. Each employee has a unique economic, geographic and personal background that dictates different needs and desires. That’s why it’s important for managers to consider the diverse options of how to foster happiness.

While every employee has different factors that lead to their happiness, Dr. Woody says that time is a gift that is universally important since you can never get time back. “Time is so critical when people are dealing with child care, aging parents, running errands, whatever it is,” he adds. “When it comes down to finding smart ways to adapt and be flexible with scheduling, it matters how you offer people the ability to get what they need done, so it’s minimally disruptive to their work schedule and their personal life.”

There’s No Such Thing as Too Much Celebrating

One way to create a happier work culture is to celebrate success more, both the small wins and the big wins. When executives congratulate one another for completing a big project or bringing in a new client, they sometimes forget to include the lower-level employees who contributed to that success. But celebrations should include everyone involved in the endeavor.

Our society is one of fixing what’s wrong and enforcing rules rather than rewarding good behavior, Dr. Woody notes. Every manager should have a positive outlook, rather than negative, by thinking about how he can let an employee know that he’s doing something right.