Why Workplaces Need a Wellbeing Strategy

Happy workplaces, where wellbeing is prioritized, are the environments most conducive to peak performance, creativity and contribution from their employees, and to bringing out the resilience and energy in people and teams that will ensure businesses survive and thrive at a time of rising inflation, disrupted supply chains and economic uncertainty.

The importance of workplace wellbeing, vis á vis performance and also in attracting and retaining talent, is now increasingly recognized. “In a few years, in the same way that big companies, law firms and consultancies tend to highlight their status or reputation by having fancy offices in central business districts, because that attracts employees and clients, they will start to use the satisfaction and happiness of their workers as a signal of their status,” predicts Dr Redzo Mujcic, Assistant Professor of Behavioural Science at Warwick Business School.

In any life domain or space, having that link between human feelings and human performance is very important

With the importance of workplace wellbeing now widely accepted, the next questions for business leaders to ask—questions that Dr. Mujcic addresses in Creating Value Through Workplace Wellbeing, the two-day Executive Education course he leads at Warwick Business School—are: how does wellbeing manifest itself? How can it be measured? How can it be improved?—and ultimately how can organizations use insights from behavioural science to create workplace wellbeing and gain competitive advantage?

“Human feelings really matter,” says Mujcic. “In any life domain or space, having that link between human feelings and human performance is very important.” How does this apply in the context of work?

Determinants of workplace wellbeing

With inflation rocketing, we all want a pay rise. But money per se is not one of the main determinants of wellbeing at work—at least not for middle income and higher earners. Gaining extra income offers diminishing returns in terms of happiness. However, as Mujcic points out, “As humans we naturally, just by evolution, tend to look over our shoulders and compare ourselves to others around us. Relative comparisons or social comparisons are really important.” A happy workplace is one where pay levels are believed to be fair, albeit full transparency is not recommended. “In reply to the CEO who asks if the salaries of employees should be made public? The answer is no,” confirms Mujcic, “Because based on evidence, those earning below the median salary of the company will tend to want to leave the company.” Money does buy happiness then, but only up to a point, and comparative pay is more the issue.

One important determinant of wellbeing at work is personal autonomy. In one example quoted by Mujcic, “A big organization with open plan office spaces found that allowing their workers to move their desks a few centimeters really made them happy. Small freedoms are very significant.” Autonomy will of course depend on the context—an academic will be given far more leeway than a counter clerk in a bank—but wherever possible managers should look to offer employees as much autonomy as possible.

Another factor that promotes wellbeing is an understanding that the work you are engaged in has meaning. Meaningful work can be work that you find worthwhile in terms of having a social purpose, or it can mean doing work that is appreciated, where you receive positive feedback from your boss. Sadly, Mujcic quotes a recent survey of circa 100,000 workers across Europe: “Just below 20% said they feel their job is totally useless to society.” Communicating the greater purpose of the organization may be a way leaders can alleviate this perception. Addressing this issue of meaningful work also involves matching up skills level to appropriate tasks. “If you're doing something that you're very good at,” explains Mujcic, “because the required skill level is low, you become bored. If you're doing something where the required skill level is high, but you're not very good at it, then you become anxious.”

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Join Dr. Redzo Mujcic on Warwick Business School's Creating Value Through Workplace Wellbeing course

Dates: 1-2 February 2023 (Delivered at The University of Warwick campus); 15-16 April 2023 (Delivered at WBS London, The Shard).

Format: In person for 2 consecutive days.

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“One of the strongest determinants of happy workers is having a good boss,” declares Mujcic. Sadly, again the reality is that far more often the opposite is true. A 2018 poll on the Monster recruitment site revealed 76% of U.S. workers polled described their boss as ‘toxic’.

What defines a good boss? “It's primarily based on competence,” says Mujcic. “What that means is that, if you were away for a day, your boss can jump into your seat and do your job for you. That's what defines competence.” Typically, managers or leaders who have worked their way up through the company, who can understand everything that happens and knows how its developed over the years, they will have this level of competence. When companies hire external CEOs, directors or managers, particularly coming from different industries, then employees are less likely to see the new hires as being competent, at least in the immediate term.

Mental and physical health are of course also key factors in maintaining wellbeing and are aspects that good managers should be cognizant of in their teams. Physical environment plays a role too, though Mujcic is skeptical when it comes to extremes: “In one of the many quirky Google offices and campuses around the world, instead of taking the lift or stairs to get up to your office, you are encouraged to climb up the side of the wall! There's a photograph of a guy in a suit and his laptop bag, and he's climbing up the wall. Google is trying to make the work environment always novel to keep people engaged, but is Google really doing a good thing here, trying to make you stay at work longer?”

There is also the chance for employees to feel greater social cohesion and connection in the workplace when they work in smaller groups or companies where they will tend to know people better than working in a big company. “Large companies tend to pay more on average, and one reason is to offset that drop in how happy employees feel.”

Work/life balance is another strong determinant of workplace wellbeing, and perhaps the element of the wellbeing challenge that has been on the corporate HR agenda the longest. We all know that time spent with family and friends and leisure time are essential to our mental health and to happiness—but ensuring that it happens, in the pressurized year-round reality of work, is a tough task.  

Instituting a workplace wellbeing strategy

Under pressure from the current economic headwinds, senior leadership teams need a clear, practical approach to strengthening workplace wellbeing. The clue is in Mujcic’s prediction that companies will soon be using wellbeing as a measure of status. Collecting, measuring and analyzing data is the key.

“We have to collect the data and have the right people that can analyze the data and draw conclusions from it. The first thing would be to appoint a group of researchers to design questionnaires and collect the data,” proposes Mujcic. “You can have titles like Chief Wellbeing Officer, but if they're not trained from a scientific research point of view, they're not going to tell you the right answers.”

Validated questionnaires should be used to measure employees' feelings on a regular basis. Asking the same sorts of questions over time allows an organization to track what's not happening in terms of wellbeing, as well as what is functioning well, and to pinpoint which groups or which individuals are most at risk of having low wellbeing and should be given extra attention.

Something that is likely to emerge—and is one of the biggest puzzles in the social sciences—is where findings reveal a big U-shape in terms of happiness metrics over a person's life, where younger and older employees will tend to be happier than those in their middle years—hitting a low around 45. “Most companies don't understand this and put all their effort into their graduate recruits and younger employees—but the biggest problem is likely to be with mid-tier managers.”

We have to collect the data and have the right people that can analyze the data and draw conclusions from it

Human feelings of wellbeing and happiness are of course fleeting and hard to measure. In the absence of wiring people's brains and monitoring their neurological activity, using questionnaires is the only practical way to collect the data. “Sometimes the criticism is that people won't tell us how they feel. Well, if you do this a lot of times, actually people do tell you how they feel,” asserts Mujcic, “and there's evidence showing that these subjective measures tend to be strongly correlated with objective measures of wellbeing.”

Defining the right questions to ask depends on the context. “Every company is different,” says Mujcic, “I'm not going to advise how to design the best wellbeing strategy, because this is going to be trial and error. I'm going to explain the behavioral science, and evidence to show what actually drives happiness, and what are the consequences of good or bad wellbeing.”

The Creating Value Through Workplace Wellbeing course

Running early in 2023, as a two-day in-person course, first at Warwick and then at the iconic Shard building in London, Creating Value Through Workplace Wellbeing is a product of The Behavioural Science group at Warwick Business School—the leading centre of its kind in Europe, at the forefront of research in psychology, economics and neuroscience, while heavily involved in real world applications.

A highlight of the course will be contributions from several senior professionals who have been involved in the collection and analysis of workplace wellbeing data and have benefitted from the application of their findings. These will include people from the legal profession, professional sports, the commercial aviation industry, the National Defense Force, the pharmaceutical industry, as well as an NHS surgeon—a group that will be able to show what they found within their varied professions.

Creating Value Through Workplace Wellbeing is aimed at leaders or managers with responsibility for organizational performance and productivity, and at senior HR professionals. Full details of the course are on the Warwick Business School website.