The obvious solution to make more profits is to cut costs but is it the most efficient or effective solution? After class nineteen I was surprised hearing how happiness drastically effects the productivity of employees. I did some searching of my own on the idea and found a study by University of Warwick in England that supported the idea.
In the study participants were given free chocolate, drinks, fruit and shown comedy skits; these participants were 12% more productive than participants who were asked about family tragedies when performing tasks. The statistics speak for themselves. It is clear to me now that keeping your employees happy will maximize productivity of the company.
However the example we used in class, Zappos, I believe was overspending on their employees. For instance humans can only be so productive and once we reach our maximum productivity there is no way of becoming more efficient. It seems that Zappos’ employees productivity may have already been maximized considering they spend a huge amount of resources on their employees only to generate a 5% profit. In order for Zappos to have a higher profit there needs to be cuts on costs.
My point is that there are different solutions for different companies. Cutting costs or spoiling your employees is not always the best solution but a balance of the two can be better than one.
Sources:
http://www2.warwick.ac.uk/newsandevents/pressreleases/new_study_shows/
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