The annals of business are full of legendary tough bosses who got the most out of their employees by driving them hard. But scientific research says otherwise. Happy employees are 12 percent more productive than the norm, and 22 percent more productive than their unhappy peers. Creating a pleasant workplace full of happy people contributes directly to the bottom line.

Sounds good--but just how do you do that? Tim Eisenhauer, co-founder of Axero Solutions which makes the workplace intranet Communifire has wide experience in both happy and unhappy workplaces, having worked for the U.S. government and "slaved his skills in corporate America," before running his own company.

Here's his advice for making employees happy and keeping them that way, even as your company grows:

1. Give employees the flexibility to create work-life balance.

In our always-connected world, the line between work and home is disappearing. Many workplace experts see this as a bad thing, but it can also be a good thing, Eisenhauer says, if you use it to give people the freedom to take care of their personal lives. "Employees tend to be happier and more productive when they know they can take time during regular working hours to handle family issues such as a sick child or ailing parent, and that they can work from home when feasible."

2. Don't outlaw office romances.

Romantic relationships between co-workers are forbidden in many workplaces. It seems logical enough. Knowing two employees have a personal relationship may lead to suspicions of favoritism by their colleagues. They or you may also fear that the office environment could suffer if romantically involved colleagues have a fight, or worse, if they break up. 

But while these may seem like good reasons to eliminate office romances, the fact is you won't be able to. In a recent CareerBuilder survey, more than a third of respondents admitted to dating a co-worker. (I've done it myself.) "Sneaking around and harboring secrets can be as destructive to workforce morale as the favoritism that can arise from personal relationships between colleagues," Eisenhauer says. "You have to guard against favoritism, but banning office romances isn't realistic."

3. Learn to empower employees.

You know micromanaging is a bad idea, but can you be sure you're not doing it? "If a strong team is already in place, the best management technique is to provide employees with goals or systems and then get out of the way," Eisenhauer says. 

The best way to find out if you're managing too much? Ask your employees. "Ask them to point to specific instances, and not just rehash the past," Eisenhauer says. Another way to tell is to ask yourself a question and be honest about the answer: Is it possible for your employees to satisfy you? "If your record says not really, it means that you check on people compulsively, whether or not it's necessary and even when it makes things worse," he says. "Learn to delegate and keep from getting involved in every little detail."

4. Fix bad processes.

"Employees find broken or inadequate processes extremely frustrating," Eisenhauer says. "Between time-wasting meetings, poor communication practices, and excessive emails, it can be hard for them to devote their full attention to their jobs."

Collaboration technology that can replace productivity-killing meetings, and internal communications systems that bypass email can help, he says. Try to eliminate anything that makes the people who work for you feel like they're wasting their time.

5. Make sure you hear--and act on--employee concerns.

One in four employees reports that conflicts arise due to communications breakdowns, Eisenhauer notes. So make sure there are clear systems in place that allow employees to freely communicate with each other and with you, and that you really listen to what they have to say.

But communication is only half the battle. If employees are telling you their problems loud and clear, but you aren't acting to address those problems, you'll have a bigger morale problem than if you had never asked for their input. So once you know what's frustrating your employees, do everything you can to fix it.