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The Happy Factory

Oct. 30, 2014
Is happiness the missing metric in your factory?

As one of the judges in IndustryWeek's annual Best Plants competition, I've spent hours examining the metrics that outstanding manufacturing facilities keep – OEE, first pass yield, on-time delivery, etc. Despite the extensive questions on metrics, no year passes where we don't receive entries that introduce a new batch of homegrown statistics and measures.

But in thinking about the plants I've visited over the past few years, what comes to mind is a factor that isn't requested on the application. What I find in visiting these high-performance factories is that the majority of employees are happy working there.

Even a casual glance at the literature on happiness shows it is notoriously difficult to define. Many times happiness is described as a state of emotional well-being. In the PBS series "This Emotional Life," psychologist Martin Seligman describes happiness as having three parts: pleasure, engagement and meaning. "Pleasure is the 'feel good' part of happiness. Engagement refers to living a 'good life' of work, family, friends, and hobbies. Meaning refers to using our strengths to contribute to a larger purpose." Seligman says all three are important, but "engagement and meaning make the most difference to living a happy life."

Now, your ERP system may not be set up to spit out happiness data, but, as a manager, it should be something to which you pay attention. Seligman and other researchers find that "people who are optimistic or happy are more successful in work, school and sports, are less depressed, have fewer physical health problems, and have better relationships with other people," according to the University of Pennsylvania's Positive Psychology Center.

What I find in visiting these high-performance factories is that the majority of employees are happy working there.

The connection between happiness and productivity is supported by recent experiments at the University of Warwick. Looking at 700 subjects, researchers found that higher levels of happiness were associated with higher levels of productivity. In fact, happiness made subjects about 12% more productive.

"The driving forces seems to be that happier workers use the time they have more effectively, increasing the pace at which they can work without sacrificing quality," said Dr. Daniel Sgroi, one of the lead researchers.

Many companies conduct engagement surveys because the benefits of engagement are so substantial. But according to the most recent Gallup research on employee engagement, only 30% of workers are truly engaged and inspired at work.

"Gallup research has found that the top 25% of teams -- the best managed -- versus the bottom 25% in any workplace -- the worst managed -- have nearly 50% fewer accidents and 41% fewer quality defects," noted Gallup CEO Jim Clifton. "What's more, teams in the top 25% versus the bottom 25% incur far less in healthcare costs."            

Gallup asserts that engagement is different from, not a subset of, happiness. "Satisfied or happy employees are not necessarily engaged employees," Gallup states. "Engaged employees have well-defined roles in the organization, make strong contributions, are actively connected to their larger team and organization, and are continuously progressing."

When Gallup looked at engagement among different occupations, manufacturing came dead last, with just 24% of production workers rated as engaged. That compares with 30% for clerical workers and 29% for government workers. Gallup said the problem in manufacturing might be that "the management culture in these companies tends to focus on process ahead of people."

Based on my experience with Best Plants winners, creating a happy workplace is not easy but certainly not impossible. Managers may not be able to create happy employees, but they can certainly create fertile conditions for happy employees to thrive. They can communicate the value of the work being performed in the plant. They can stress the necessity both for high achievement and for an environment that respects people. They can offer employees growth through training and participation in meaningful activities on the shop floor, in meeting rooms and in the community. They can pay a fair wage and benefits. And they can employ generous amounts of listening and praise.

Gallup puts the total cost of disengaged employees in the U.S. at $450 billion to $550 billion annually. That can't be making anybody happy.

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