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This is how a happy workforce can transform a company

Employee happiness doesn't tend to top the list of corporate objectives, however businesses ought to take the well-being of their workforce more seriously or it could cost them their bottom lines, say experts.

"Happy workers are better workers. Positive workplaces have higher levels of engagement which goes directly to performance and productivity, innovation and creativity, team work and collaboration," said Timothy Sharp, founder and chief happiness officer of the The Happiness Institute – an Australia-based organization that provides services such as executive coaching and corporate consulting.

(Read more: Nearly half of the world's employees unhappy in their jobs)

"Positive organizations attract and keep better employees far more effectively. Ultimately, all of this adds up to greater profitability," said Sharp, who is also an academic and clinician.

March 20 marks the official International Day of Happiness – a day established by the United Nations to recognize the relevance of happiness and well-being as universal goals and aspirations in the lives of human beings around the world and the importance of their recognition in public policy objectives.

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Nic Marks, a pioneer in the field of well-being research, says many corporates tend to grossly underestimate the importance of a happy workforce.

(Read more: Americans Hate Their Jobs, Even With Office Perks)

"There's a feeling that happiness is a light word, and work is a heavy word – and that they feel very different. Organizations seem to want us to leave emotions at the door and be hyper-rational," said Marks, who is the director of Happiness Works - an organization that provides solutions for unlocking happiness and productivity in the workplace.

"However, when we're enthusiastic, we mobilize energy to approach a task, and we're focused on achieving something," he added.

Happy employees are typically engaged in their work, motivated by the mission of their company and get along well with their colleagues.

"These factors are a much bigger motivation than finances and bonuses for most people," Marks noted.

According to Jim Harter, chief scientist of workplace management and well-being for Gallup, employee disengagement is an immense drain on economies throughout the world.

(Read more: Yes, your boss probably is happier than you are)

Almost 87 percent of the global workforce is "not engaged" or "actively disengaged," according to Gallup's World Poll published in October 2013.

Disengaged employees are essentially "checked out," putting time but not energy into their work. Actively disengaged employees "are not just unhappy, but busy acting out their unhappiness and undermining their engaged coworkers' accomplishments," says Gallup.

Gallup estimates that active employee disengagement costs the U.S. $450 billion to $550 billion per year.

Business units with low employee engagement tend to have higher absenteeism and employee turnover, more accidents on the job, more shrinkage or theft, lower productivity, inferior customer service, and lower profitability.

On the other hand, companies with engaged workforces tend to have higher earnings and seem to have recovered from the recession at a faster rate.

(Read more: Scandinavians leadthe way in world happiness)

"Business units with highly engaged workers (in the top quartile of all business units) achieve 22 percent higher profit in comparison to those with fewer engaged workers (in the bottom quartile)," he said.

Simple ways to boost happiness levels at work

Sharp of the The Happiness Institute says raising happiness levels at work comes down to employees choosing the right attitude when they walk through the door each morning as well as management fostering a culture of appreciation.

"Employers can create the right culture: showing that you value your employees, encouraging team work and allowing people to talk to each other and work together in a positive way. Although that might sound obvious, some companies do it a lot better than others," he added.

In addition, making sure employees can use their strengths in their jobs daily is vital, says Gallup.

"All employees have strengths — the unique combination of talents, knowledge, and skills that help them do what they do best every day. These strengths do more than make them unique individuals; they also serve as employees' — and the organization's — greatest opportunities for success," Gallup said in its Global Workplace Report.

—By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H