Corporate Wellness

How a positive workplace culture affects productivity

2 May 2017
Last updated on 1 Jun 2023

If you stopped to ask your employees if they’re happy in their job, how do you think they would respond? Perhaps you think it doesn’t matter – after all, you can’t please all the people all of the time. But having a happy work environment really does matter if you want to retain employees and run your business optimally.

While a high-pressure, cut-throat environment may make it feel as if everybody is getting the job done, there’s a growing body of research to show that this sort of culture is harmful to productivity over time.

How does happiness affect staff performance?

A stressful working culture leads to health problems such as heart disease. A study by Anna Nyberg, at the Karolinska Institute in Sweden, has shown that the lower someone’s rank in a corporate hierarchy, the higher their chances of cardiovascular disease and death from heart attacks.

Heart disease is by no means the least of your worries if your employees’ working environment is unsuitable. What about their engagement at work?

When staff are disengaged, it’s more than likely associated with the working environment. Disengaged staff brings a whole raft of problems – when they’re not happy in their job, workers are less effective, their motivation is reduced and they are more likely to call in sick from work.

Aside from absenteeism and lower productivity, when workers are unhappy they’re more likely to search elsewhere to see if the grass is greener perhaps with one of your competitors.

The latest report by Investors In People (IIP) supports this. More than a third (38%) of UK workers said they are unhappy in their job and plan to switch companies because they feel they will be valued more somewhere else.

What can you do about it?

While offering staff benefits such as flexible working and gym membership can strongly help to lift the spirits, another major thing employers should address is the workplace culture.

Working in a positive environment has a number of benefits, both for businesses and staff.

  • Increased motivation
  • Higher staff retention
  • Less absenteeism
  • Boost productivity

How to promote a positive workplace culture

Reed Global has come up with a list of the key factors that contribute to a happy workforce.

Respect and support

There should be a supportive environment for workers, with employers showing that workers’ efforts are valued and treating them fairly and equally. The payback to the business is a more loyal workforce and increased work ethic.


When management are scurrying about and whispering behind closed doors, it fosters a sense of suspicion among staff. Ensure that staff feel more involved with the business by embedding a culture of transparency around its processes, and adopting good communication.


The health of your staff is not limited to their physical fitness but also their emotional wellbeing. Having a positive work environment is closely linked to both, so it’s essential for businesses to put staff safety and wellbeing at the top of their agenda.

As well as businesses’’ legal obligations around occupational health and safety, there are other ways to improve the health of your staff, for instance, encouraging team sports and gym membership, or offering healthy eating choices.

Healthier workers are likely to be happier workers, and you can benefit by having fewer work-related accidents, reduced sick pay and reduced insurance costs.

Good leadership

According to IIP, the cost of poor leadership to UK businesses is £39bn each year, which reflects the cost of recruiting staff when employees seek opportunities elsewhere.

Business leaders are there to motivate and inspire their workers, and the best ones know how to bring out the best among their staff. Employees should be able to trust management, knowing that they are leading with integrity.

The best approach to leading by example is to show that you’re willing to get stuck in when needed rather than standing back, and to take a positive and constructive approach to your workforce’s performance.
Performance reviews

Performance management should be a structured and robust process. It’s not about micro-managing your staff, but making sure that everybody’s supported in doing their job to the best of their ability. It helps to ensure that all staff are ‘pulling in the same direction’.

Reward culture

This isn’t necessarily about bonuses. Staff need to feel valued in their job and want to see that they’re contributing to the bigger picture.

It’s not about rewarding staff who work the longest hours either – which does not automatically equate to the highest performers – and it’s not about pitting staff against each other.

You can reward staff materially through the perks you offer, but businesses stand to gain the most when they let employees know that they’re appreciated through praise when it’s due.

Team building

Ever found a job candidate who ticks all the boxes but is missing the one ingredient that you know will help them become part of the team?

One of the crucial factors in a positive work environment is a team that works harmoniously together.

Trust and good working relationships are part of a happy workforce. Team building exercises can help your staff to bond and ultimately work more effectively together.

4 steps to super-charge your way to workplace positivity

Changing your workplace culture into a positive one is easier said than done. It starts at the top, with leaders setting the tone for the organisation. These tips from the Harvard Business Review are a great place to begin.

Step 1: Encourage good social relationships

There’s plenty of research to show that positive social connections have wide-ranging benefits including staff getting sick less frequently, experiencing less depression, better mental acuity, and better job performance.

Step 2: Empathy

There’s no doubt that employees respond more positively to a boss that shows empathy. Some studies have found that when leaders demonstrate compassion toward their employees, staff are more likely to cope with the challenges.

Step 3: A little kindness goes a long way

Kindness shown by a manager to staff helps good vibes filter down through the entire organisation. But more importantly, when leaders go out of their way to help, employees are inspired to become more loyal and committed.

Step 4: Talk things through

A trouble shared is a trouble halved, and when leaders encourage their staff to talk to them about their problems, it leads to improved performance. Research has shown that encouraging staff to speak up or ask for help builds a culture of safety rather than a fear of negative consequences – and this kind of empowerment is vital for innovation.

In short, there’s no limit to the benefits to be gained by building a positive workplace culture – from attracting employees to bringing out the best in your workers, going the extra mile to make sure your staff are happy could have a bigger impact on your bottom line than you think.

Increase your team's productivity



Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.