Smiling employees may be the reason tills keep ringing

25 April 2015 - 02:00

Was it the new quinoa pots on the menu? Or the 50000 portions of macaroni cheese it is selling each week? There are several reasons why British sandwich chain Pret a Manger was able to report an impressive set of annual figures this week - with sales up 16% to £594-million (about R11-billion).

But many management experts think they know the biggest cause: happiness.

The company takes the wellbeing of its workforce very seriously. Not because it is paternalistic but because it thinks there is a direct link between the happiness of the staff and the company's turnover.

CEO Clive Schlee, interviewed a few years ago as he toured some outlets, said: "The first thing I look at is whether staff are touching each other - are they smiling, reacting to each other, happy, engaged? I can almost predict sales on body language alone."


The staff are given a bonus if a weekly secret shopper spots happy employees behind the counter. No wonder they are often frighteningly enthusiastic and decidedly unBritish in their high-fiving and whooping.

It is easy to sneer at Pret's management style as nauseatingly Californian and to dismiss any link between its workers' real wellbeing and company profits. But the economics of happiness is a topic being taken increasingly seriously at universities as well as on factory floors, warehouses and offices.

Professor Andrew Oswald, of the University of Warwick, is regarded as one of the leading experts in this field. Last year he and his team published major findings. In simple terms, happy people were 12% more productive than "normal" people.

Oswald insisted that his experiment, involving 700 people in laboratory conditions, was the most conclusive proof that there is a causal link between happiness and improved performance.


Volunteers were either shown a comedy clip making them laugh or given free chocolate or fruit as an incentive. They were then given a series of arithmetic tasks. The happy group just did better.

The paper was widely reported and cited as a compelling reason why companies needed to follow the example of Google. The internet company is regarded as the pioneer in employee happiness. Googlers, as they are called, are given free ice creams, free lifts to work, and the opportunity to spend 20% of their time in the office on non-work projects of "passion".

Cynics suggest this is a clever method to ensure workers never need to leave the office. But many companies have embraced this ethos.

Work undertaken by Professor Alex Edmans at the London Business School and Wharton, suggests there is a link between not just happier workers, but between happier companies and shareholder returns.

- ©The Daily Telegraph, London