If you're happy and you know it, clap your business hands

As your mind opens up there's greater curiosity and a free flow of ideas and productivity. Photo / Getty Images

In business the concept of happiness is likely to make some groan, roll their eyes or be dismissive. But increasingly we can't ignore the evidence that it helps business.

As science increases its ability to measure the positive effects of happiness on the mind and body, businesses are growing more interested in how it can be achieved and help optimise what they do.

Creativity and innovation give a competitive edge and you need a workplace that encourages idea-generation, a high rate of productivity and a healthy bottom line.

Happiness broadens your focus and expands your thinking. The positive brain is 31 per cent more productive than the brain in a negative, neutral or stressed state.

As your mind opens up there's greater curiosity and a free flow of ideas and productivity. Engagement is a measure of this.

Surveys from American management consulting company Gallup continue to find only 13 per cent of employees are actively engaged at work.

In the US alone, this could mean a cost of up to $737 billion in lost productivity annually.

A 700-person study by economists at the University of Warwick found that happy employees were 20 per cent above the control group in terms of productivity. The same study found unhappy workers were 10 per cent less productive than the control.

Individuals who are happier tend:

• to manage their time more effectively;

• to exhibit more creativity;

• to solve problems more effectively;

• to collaborate better; and

• to make better leaders.

Having a company culture that encourages happiness can generate better solutions and innovation that might not have come to light in a more oppressive environment.

Two theories link culture and happiness: Maslow's Needs Theory and Comparison Theory.

Maslow says whether your needs are satisfied determines if you will lead a good life. The more needs are satisfied, the happier people are.

Lower-level needs such as food, water, safety, belonging and esteem must be taken care of before higher needs can motivate us.

Maslow's hierarchy demonstrates a correlation between what needs should be satisfied at an organisational level for an employee to grow. When a workplace is designed and managed to create meaning for its workers they tend to be healthier and happy.

Comparison Theory says human happiness depends on comparisons between actual quality of life and perceived life circumstances, called benchmarking.

Using benchmarking we can see organisations that are successfully meeting their employees' needs, allowing them to grow and self-actualise. Examples of where employee growth is being realised can include creativity and pursuit of knowledge. That takes time and the ability to reflect.

US multinational 3M adopted a programme in 1948 called "15 Percent Time" that allowed employees to use work time to follow their passion and hatch ideas. It led to scientist Art Fry inventing the Post-It Note.

More recently, Google introduced a scheme called "innovation time off" or 20 per cent time, where they let employees not "work" for eight hours of their week to complete side projects that drive creative and innovative ideas for the company.

This resulted in the creations of Gmail, Google Earth, and Google Talk.

New products, such as clear bandages and optical films that reflect light, were developed by Hewlett-Packard Labs employees in personal creative time given over to just such innovation.

There is an exceptionally strong case to show that if you build a company culture to generate greater levels of happiness, purpose and engagement, the business will reap the rewards as employees innovate and produce better results for the company.

• Petrina Coventry is professor of University of Adelaide

- The Conversation