Happiness has failed, but it has taught us an important lesson


Ensuring employees are happy hasn’t delivered the productivity gains promised

The sun is setting on happiness. Senior management and HR directors are starting to lose faith because some teams have ended up happier but markedly less productive.

If we’re looking for productivity gains what should we be focusing on now? And if you’ve concentrated on happiness and it’s failed to deliver the goods what can replace it?

Happiness and productivity aren’t the same thing

A lot has been written about happiness in the workplace, but academic evidence is starting to stack up that increasing the happiness of employees doesn’t necessarily increase company profits.

One piece of research from Warwick University found an inverse relationship between job satisfaction – or happiness – and profitability. The happier the workers were the worse they performed. And a comprehensive meta-analysis of the research found a “very modest” relationship between happiness and productivity.

Happiness has forced us to become myopic

I believe focusing on happiness has caused us to lose sight of the bigger picture; it has encouraged us to think in terms of individual employees rather than teams.

We have been so focused on trying to make individuals happy that we have lost perspective, and in some cases forgotten that our ultimate goal as HRDs is increasing team and company performance. And there is no clear link between individual happiness and team performance.

If anything there is a negative relationship. That is because a happy team usually signifies a homogeneous team – everyone thinks, feels, and acts alike. There is no conflict, argument or tension. But it is exactly this creative tension that leads to teams challenging themselves and finding new, innovative ways of doing things.

The search for happiness has been vital

Our diversion into happiness has shone a light on a common management theory mistake: a relentless focus on the individual over teams. Only now is research starting to show that this individual-centred approach is mistaken.

And the benefits of focusing on teams instead is clear. According to the latest Gallup State of the American Workplace report, poorly-managed, unengaged, and misaligned teams are on average 50% less productive and 44% less profitable than well-managed groups. It is difficult to find any individual-centred metric that has such a strong relationship with profitability.

Of course, we know this from experience. We recognise that we spend half of our days, if not more, resolving and mitigating inter-team politics and conflict. We know that teams are the core of our organisations, not individuals. We also know that a team of average employees can (and often do) outperform a team of A-star individuals.

Time to move gently away from the focus on happiness

So as we move away from happiness and other metrics that concentrate on individuals what should we focus on? I think the answer should be ‘team effectiveness’.

We should seek to monitor, track, and increase ‘team effectiveness’ across organisations. We should constantly ask: how effective are our teams right now? Is that increasing or declining? Are there any stand-out teams, positive or negative? Why are the figures looking this way, and how can we improve them?

Our overriding goal should be to increase the effectiveness of teams. In terms of driving performance and productivity, and increasing engagement and outputs, we must lift our vision to the team level. And to do this we need to change our mindset.

Turning this into practice

Fortunately, we already have the necessary tools to get started: over the last few years a number of organisations have launched 360-degree real-time feedback tools. So far these have been focused on individual performance and metrics. But these same tools could be repurposed to collect data about teams, and generate real-time figures about team effectiveness.

These tools can be used to gather feedback from individuals on the effectiveness of teams they both belong to and work with, using criteria such as delivery, quality, and attitude. They can also collect important feedback on teams from outside sources, such as clients.

The benefit of capturing this feedback is that it will provide us with the raw data to make more informed choices and identify exactly what makes a team successful. It’s also inherently more scalable and cost-effective than bringing in team coaches who can only work with a small group at a time.

As the beginning of the end dawns for happiness, I hope that we’ve collectively learnt as an industry that focusing on individuals within an organisation has failed. It is time to lift our sights and refocus on teams and teamwork. These are the metrics that matter.

Ab Banerjee is CEO and Founder of ViewsHub, the team-to-team scoring and feedback platform


Noting the author and their business, this article ought to have been flagged as an advertisement rather than an objective assessment of a genuinely emerging trend. Fundamentally, organisations are composed of individuals, irrespective of how they are subsequently structured. In addition, just because technology/software enables or allows us to develop a new way to make, do, examine or measure something, doesn't mean it's the right thing to do.


I don't think the article was a particularly wonderful outline of a trend either, as I don't think there are many organisations focusing on happiness. Engagement yes, but not happiness. However I still think there are some important points in the article. Organisations are composed or individuals but the point of performance is increasingly teams and other groups. And there are major trends in many organisations involving shifts from individuals to groups (see my new book, The Social Organization). But the key is not to focus on any particular outcome anyone else tells you to, whether that is happiness, engagement, team effectiveness or whatever, but to work out what particular outcome you need - and then to find the process, technology, measures etc etc that enable you to improve the particular outcome you have identified.


Many coaches will know the simple Boston Grid based on support and challenge. This article seems to miss that high support AND high challenge is a possibility, and can bring the results that high support alone will not bring.

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