Leaders are always looking for a new benefit, program, or strategy to increase employees' performance and productivity. But new research has revealed that there is something that can trump incentives like company cruises or gourmet lunches.

Harvard Business Review cites a recent study out of the University of Michigan that found "positive and virtuous practices" can help an entire workplace perform better. 

The study, led by associate dean of executive education Kim Cameron and published in The Journal of Applied Behavioral Science, found that the most effective practices revolve around the belief in inherent human decency. Cameron says leaders and managers need to treat others with respect, trust, and integrity; care for employees like friends; be kind and compassionate when colleagues and employees are in need; practice forgiveness and avoid blame; and inspire employees to find a greater meaning in work.

Cameron says his team found that doing so benefits companies in myriad ways. "When organizations institute positive, virtuous practices, they achieve significantly higher levels of organizational effectiveness--including financial performance, customer satisfaction, and productivity," Cameron writes in the study. "The more the virtuousness, the higher the performance in profitability, productivity, customer satisfaction, and employee engagement."

In HBREmma Seppala, a research psychologist and associate director of Stanford's Center for Compassion and Altruism Research and Education, explains how to integrate Cameron's findings into your leadership methods.

Balance positivity and corporate culture.

A company needs to be serious about reducing risk and diversifying its revenue stream, but it doesn't have to leave out human decency when dealing with employees. Steve Schroeder, founder and CEO of Chicago-based packaging company Creative Werks, told Seppala that his company focuses on professional perks and emotional well-being. He provides job training, professional development, and bonuses, but also makes sure his employees are happy. Schroeder says he hires people who fit into his happy and supportive culture: "Caring people never let their colleagues or the clients down," Schroeder tells HBR. One of the company's core values is balance. According to Creative Werks's website, "We promote healthy minds and healthy bodies because we value healthy employees. Balance is quintessential in ensuring employee happiness and sustaining growth."

Complete small acts of positivity.

In many fast-paced industries, the well-being of employees is often pushed to the side or viewed as a distraction. The idea that there's no time for being nice or no reason to spread positivity is not only incorrect, it's detrimental to productivity. Cameron says companies that have implemented positivity programs--initiatives such as keeping a daily gratitude journal and spending time once a day helping someone in need--have improved employee performance within a short period of time.

Smart startups often deviate from oppressive corporate practices and ensure employees are happy. Shubhra Bhatnagar, a former investment banker who founded health food distribution company KarmaLize.Me, which gives 50 percent of its profits to charity, focuses heavily on employee well-being. "We make sure that the stress of a startup business does not hamper the happiness quotient of our team or impact our core business values," she tells HBR. "We use a meditation app (Sattva) to help us reconnect with ourselves and each other, and to create a more positive atmosphere in our office."

Published on: Mar 23, 2015