As the Industrial Revolution swept America in the late 1700s to the early 1800s, managers started to become more interested in productivity. Over the coming decades, Congress passed safety regulations that sought to improve working conditions and put a cap on the amount of hours that employees could work each day. At the same time, sociologists began studying exactly what influences productivity — and their experiments continue to shape the way we work centuries later. All of this research has revealed some timeless insight into human behavior, motivation, and how these factors affect productivity.

The Hawthorne Effect

One of the most famous studies on productivity set out to pinpoint exactly which variables influence individual performance. Researchers began with two groups: a control group, and a group whose environment they adjusted. Over time, the researchers improved lighting, altered working hours, moved break times, and shuffled other environmental factors.

What they found was that whenever they made a change, productivity increased — while the control group held steady. Perhaps more interesting was the fact that any change, whether positive or negative, led to greater productivity. This held true even when all the environmental factors were returned to their original state.

As it turns out, worker morale was boosted by the simple fact that the company was interested in making changes and showed concern about their work environment and well-being. Even if employees didn’t necessarily like the changes, they were bolstered by the fact that managers were trying to make improvements, which directly improved their productivity. 

Maslow’s Hierarchy of Needs

In 1943, psychologist Abraham Maslow published a paper that outlined a 5-level hierarchy of individual needs. The idea was simple: if a person’s simplest and most basic needs weren't being met, they wouldn't feel motivated to achieve at a higher level. You have to start at the bottom and meet every need along each rung of the ladder in order to encourage high performing employees.

The 5 Levels

  • Physiological: in the workplace, this means food, water, and a comfortable place to work.
  • Safety: this goes beyond immediate safety concerns and also involves financial security, health, and well-being. 
  • Belonging: feeling connected to others in the workplace and forming friendships.
  • Esteem: feeling confident in their abilities and respected by others.
  • Self-actualization: feeling that they can achieve anything and reach new levels of success within the company.
  • Addressing each level of this hierarchy creates a happier and more productive employee.

Expectancy Theory

The Expectancy Theory takes a close look at motivation and what drives workers to try and reach their full potential. In 1964, Victor H. Vroom theorized that people make choices based on whether they think the results of their behavior will lead to desired outcomes. Essentially, all our choices come down to three basic elements:

  • Expectancy: the belief that the effort you put in will result in your desired outcome. This is often influenced by individual confidence levels and the perceived difficulty of the desired goal.
  • Instrumentality: the belief that you will be rewarded if you meet expectations.
  • Valence: how much value you place on the reward.

Workers need to believe that they will be acknowledged and rewarded with something valuable if they meet or exceed productivity expectations. Employers have to determine what rewards employees truly want, clearly communicate what those rewards are, and be consistent in handing out rewards for excellent performance.  

Higher Pay Doesn’t Increase Productivity

It would be easy to assume more money equals stronger incentive, increased productivity, and greater work satisfaction — and more recent studies tend to focus on that relationship between money, rewards, and happiness. Somewhat surprisingly, however, the research shows that while happiness does affect productivity, money isn’t a large part of the equation. Some compelling statistics to consider:

  • 87% of workers are disengaged at work
  • Unhappy workers are 10% less productive
  • Unhappy, unproductive workers cost companies around $500 billion a year
  • Happiness improves productivity by 12%

So how can companies create happier employees — and boost the bottom line in the process? The answer is to invest money in employee support programs instead of just raising wages. We are seeing this trend across the nation as more employers offer benefits like paid family leave, unlimited paid vacation days, health and wellness centers, and work from home opportunities. Essentially, this is another example of the Hawthorne Effect at work. When employees feel like their well-being is a priority, they are more productive. 

All of these theories distill down to a single simple truth: workers, no matter what industry or century, want to feel safe and appreciated. If companies make an effort to invest in their workers' happiness and well being, they will improve productivity. Investing in better benefits, increased employee support, and improved workplace conditions rather than simply handing out raises yields a bigger return on investment, because time and time again, studies prove that happy employees are more productive employees. 
Author Bio:  Mike Hanski writes for Bid4papers. His productivity secret is simple: do what you like. And ear plugs. In that order. You can find Mike on Google+.

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