The healthiest Companies outperform their Competition on the Stock Market

Smiling - MappaliciousAre you working for a company that treats you like a valuable human being? Do they care about your psychological and physiological health? Yes? Good for you! And good for them as well!

A couple of weeks ago, I shared Alex Edmans´ studies on how the “Best Companies to work for” in the U.S. outperform their competitors on the stock market. Now here comes another piece of compelling evidence for the idea that treating your employees exceptionally well is not a cost factor, but rather gives your company an edge pertaining to financial performance. For a study published in the Journal of Occupational & Environmental Medicine, a group of researchers compared the stock market performance of companies that were awarded the “. Everett Koop National Health Award”(a prestigious award for companies running outstanding employee health programs named after a former Surgeon General) with the average performance of companies comprising the Standard and Poor’s (S&P) 500 Index. What they´ve found:

The Koop Award portfolio outperformed the S&P 500 Index. In the 14-year period tracked (2000–2014), Koop Award winners’ stock values appreciated by 325% compared with the market average appreciation of 105%.

The researchers conclude that “this study supports prior and ongoing research demonstrating a higher market valuation – an affirmation of business success by Wall Street investors – of socially responsible companies that invest in the health and well-being of their workers when compared with other publicly traded firms.”

 

Image via Gratisography

 

What Voltaire knew about Health and Happiness

So, eminent French philosopher Voltaire died about 230 years ago – but obviously, he had some intuitive insights into what psychological science would find out over the later part of the 20th century: namely, that happiness is not (only) and end in itself, but also a doorway to further human objectives, such as creativity, success, and a long and healthy life

Voltaire_Happiness

 

What makes a Good Life? Lessons from the longest Study on Happiness

Robert Waldinger is a Clinical Professor of Psychiatry at Harvard Medical School and the current Director of the Harvard Study of Adult Development (part of that is the so-called Harvard Grant Study; see this post for prior coverage on Mappalicious).  It is a 75-year longitudinal study of 268 physically- and mentally-healthy Harvard college sophomores from the classes of 1939–1944. It has run in tandem with second study called The Glueck Study, which included another cohort of 456 disadvantaged inner-city youths from Boston.

In his TEDx talk, Waldinger shares his most important takeaways from that study on what keeps people happy and healthy – and it shouldn´t surprise you all that much:

Other People Matter!

 

P.S.

This presentation will also be posted as No. 46 on my topical list of Positive Psychology-infused TED talks.

(Almost) everything you know about Happiness is wrong. Maybe…

LancetA recent study that was published in the prestigious medical journal The Lancet found that happiness (or unhappiness) does not affect our health and mortality (see The Atlantic or New York Times for coverage about the original piece). According to the NYT, the

“results come from the so-called Million Women Study, which recruited women ages 50 to 69 from 1996 to 2001, and tracked them with questionnaires and official records of deaths and hospital admissions. The questionnaires asked how often the women felt happy, in control, relaxed and stressed, and also instructed them to rate their health and list ailments like high blood pressure, diabetes, asthma, arthritis and depression or anxiety.”

The research article received a huge amount of attention as the results run counter to a large body of extant empirical evidence on the relationship of positive emotions and longevity (please see the paper Happy People Live Longer: Subjective Well-Being Contributes to Health and Longevity for an overview).

Accordingly, a reply to the Lancet article was written as an op-ed in the Los Angeles Times by Positive Psychologists Ed Diener, Sarah D. Pressman, and Sonja Lyubomirsky (Can 1 million women be wrong about happiness and health?). They provide several arguments on why the interpretation of the data about the happiness-health-relationship might be flawed.

For more detail, I urge you to read the L.A. Times article. Just my five cents: The participants were 59 years old on average when entering the study. So, whatever happened before that age was out of scope. Now, I´m not an expert on this – but I hypothesize that how happy you were in your 20s, 30s, 40s, and 50s might (strongly) affect how healthy you are in your 60s and beyond.

For that reason, even though the research is based on a truly large sample, I am not willing to follow the authors´ conclusion.

Nine requisites for contented living – according to Goethe

If Johann Wolfgang von Goethe lived today, I´m sure he would be a Positive Psychology evangelist.

“Nine requisites for contented living:
Health enough to make work a pleasure.
Wealth enough to support your needs.
Strength to battle with difficulties and overcome them.
Grace enough to confess your sins and forsake them.
Patience enough to toil until some good is accomplished.
Charity enough to see some good in your neighbor.
Love enough to move you to be useful and helpful to others.
Faith enough to make real the things of God.
Hope enough to remove all anxious fears concerning the future.”

Goethe - Contentment

The ROI of Happiness: Spreading the News across Germany

Dr. Nico Rose - Handelsblatt CFO KongressI am super-happy today. Just came back from back-to-back talks on Positive Psychology / Positive Organizational Scholarship in Frankfurt and Munich. On Tuesday evening in Frankfurt, I spoke to a group of about 50 CFOs at a convention hosted by Handelsblatt, one of Germany´s premier financial news outlets. I was a bit nervous since, a) it was a dinner speech and I am not that experienced in giving speeches without a PowerPoint presentation; and b)  I am obviously not a CFO myself – all participants were much older and more advanced in their careers than I am right now. Nevertheless, people were listening attentively and I received a lot of positive feedback. These were my ten main points to convince the financial leaders that investing in their employees´ happiness will bring them a solid financial return:

  1. Compensation: Happy employees are more intrinsically motivated and therefore need less extrinsic motivation. In turn, a happy workforce helps to keep personnel costs at a reasonable level over time.
  2. Health: Happy employees are sick less often, and if they are, return to work after fewer days. This helps to keep healthcare costs in check.
  3. Retention: Happy employees stay with companies for a longer time and create positive word-of-mouth. This helps to keep save costs concerning the functions of employer branding, recruiting, and training.
  4. Cooperation: Happy employees typically display more positive self-regard and therefore are better at handling conflict and situations that entail negotiation.Dr. Nico Rose - Handelsblatt CFO Forum
  5. Engagement: Happy employees display more organizational citizenship behavior (OCB) and therefore are willing to take on responsibility over and beyond their role descriptions and department boundaries.
  6. Innovation: Happy employees are more creative on average. This may foster innovation processes.
  7. Problem-solving: Additionally, they will find solutions to existing problems faster and more frequently.
  8. Meaning: Happy employees experience more meaning at work – which is one of the strongest drivers of motivation and engagement.
  9. Contagion: Happy employees will make other employees happy (at least: happier) by way of emotional contagion, potentially creating an upward-spiral of emotional well-being in the workplace.
  10. Customer Satisfaction: Happy employees will make your customers happy – via their motivation, exceptional engagement, and emotional contagion as well.

Since I was talking to CFOs, I closed my speech by referring to an article from the Journal of Financial Economics. In a paper titled “Does the stock market fully value intangibles? Employee satisfaction and equity prices”, Wharton´s Alex Edmans was able to show that a fictional stock portfolio build out of the “100 Best Companies to Work For in America’’ (as a proxy for companies whose employees are highly satisfied) has significantly outperformed carefully selected benchmarks on a yearly basis between 1984 and 2009. Ain´t that nice? They day after in Munich in a very stylish old movie theater, I spoke about Positive Psychology in general to 160 people working for the German branch of the Bonnier Group, a Scandinavian publishing house. Hopefully, this gave them tons of ideas for new books on Positive Psychology here in Germany. 🙂 Since this was my wife´s birthday and I couldn´t be home that day until dinner, I asked my audience to sing “Happy Birthday” for her – and they did. Thank you, kind people at Bonnier…

Foto credits: Euroforum / Handelsblatt

This is what Thomas A. Edison wrote about the Doctor of the Future in 1903

Thomas A. Edison seems to be an endless source of witty quotes and quotable wisdom. I stumbled upon this one some days ago. Transfer his words from medicine to psychology (which practically did not exist at that time) and you get a near-perfect description of what Positive Psychology tries to accomplish in the realm of mental and emotional well-being.

Edison - Doctor of the Future
When I look at how often stuff like Prozac and Ritalin is given to people, there obviously is still a long way to go for us. But it will be done…