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Avoiding the Hedonic Treadmill: designing a sustainable employee engagement strategy

14 December 2017

The concept of the “Hedonic Treadmill” is well established amongst psychologists, but what lessons can HR draw from it in relation to improving employee engagement and productivity?

The Hedonic Treadmill sounds like something plucked out of the pages of a comic book but, essentially, it is the tendency to quickly return to a relatively stable level of happiness despite significant changes caused by life events.

To put it another way, everyone has a set level of happiness or satisfaction. Some people are naturally happy; others are more melancholic. While we all have default settings, those default settings are not all the same. Positive or negative events might shift the default setting up or down, but after a period of time the happiness level will revert to where it was before.

For example, when something positive happens, such as a promotion, happiness levels increase.  Similarly, when something negative happens, such as losing a job, happiness levels decrease. However, as time goes on, happiness levels return to the original default level. The reason for this is that once someone achieves a goal or enough time passes, we adapt and “acclimatise” to the new situation, causing it to become the norm.  This is the case regardless of whether it is a positive or negative event.

Statisticians might call it “reversion to the mean”. Economists might talk about the “law of diminishing returns”.

Is reversion to the mean inevitable?

In 1987, Brickman, Coates and Janoff-Bulman published their study called: ‘Lottery winners and accident victims: is happiness relative?’. They conducted an experiment which studied the levels of happiness between people who won large sums of money from the lottery and people who had become paralysed in accidents. It revealed that after an extended period of time neither group appeared to be happier than the other.  Despite the initial strong positive or negative reaction to the event, both groups reverted to their set level of happiness. This suggests that, whatever happens, after a time we consistently return to a default level of happiness.

But reversion to the mean is not inevitable. A study by Fujita and Diener looked at a large group of Germans for 17 years and found that for 24% of them, their levels of happiness changed significantly from the first five years to the last five years. So it does appear to be possible to change an individual’s level of happiness for good.

What can we learn from this when designing initiatives to engage a workforce?

The internet is full of articles highlighting the costs of employee disengagement (see the following examples, Low engagement costs UK businesses £60 billion a year; Disengaged retail workforce costs UK £628 million a year; Employers count the cost of disengaged employees; The hard cost of disengaged employees). Although many of these are hyperbolic, there is a kernel of truth in all of them: disengaged employees cost businesses money.

Oswald, Proto and Sgroi from the University of Warwick conducted an experiment which found that people who were happy in the workplace were on average 12% more productive than those who were not. In the workplace, happiness and engagement are largely synonymous. People work harder and better when they are happier.

But do happy individuals lead to a happy team? Possibly. Having common goals and collaborating on finding solutions creates a sense of achievement when that team is successful. This can positively impact on team effectiveness which in turn ‘feeds’ the happiness of individuals, creating a virtuous circle.

Teams made up of diverse thinking individuals are usually more successful because they benefit from multiple viewpoints. However, this can create the potential for conflict as much as the potential for success.

There is no magic wand to engage a workforce. One-size-fits-all engagement strategies never work because every workplace – and every person within it – is so different. Leaders and line managers need to understand their employees’ natural tendencies and feelings so that efforts can be tailored appropriately.

Helping employees develop and fuel their own productivity can generate more constant motivations for individuals.  When crafting job roles, ensure there is room for internal motivators like autonomy, purpose and mastery (the three key internal motivators identified by Dan Pink in Drive, and, arguably, what Maslow was referring to by “self-actualisation” in his famous hierarchy of needs).  To make this work, however, trust must be at the heart of an organisation’s culture.

Generous benefits, such as lavish Christmas parties and free food, will go some way towards keeping staff happy. But as soon as staff start to expect these benefits, they are no longer a motivator – this is what Brickman, Coats and Janoff-Bulman proved in their study of lottery winners. Employers should think less about just giving staff “stuff”, but instead think about what those staff will do with the things you offer them and the impact it will have on their lives.

Benefits and engagement activities that focus on self-growth and self-development (such as gym memberships, mindfulness sessions, charitable activities or subsidised education) are less likely to fall prey to the law of diminishing returns and avoid the Hedonic Treadmill.

 

 

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