FOR Singapore, a city state with limited natural resources and a small local labour force, improving productivity has been key to its economic success and continued prosperity.

The government has clearly emphasised that raising productivity is at the centre of the country's economic agenda. "It is the only way we can raise our living standards in the years to come," according to the 2014 Budget Statement.

So far, Singapore has used conventional ways to raise productivity: capital investment, importing foreign labour, skills training, and technological and business innovation. However, it has overlooked and underestimated one less conventional factor: the power of happiness.

Happiness is a mental or emotional state of wellbeing defined by joy, satisfaction, contentment, enthusiasm, and interest. Many psychologists have pointed out that happiness promotes the capacity of innovation, improves memory, and leads to greater altruism.

There have been clear and positive links between workers' happiness and their productivity; put simply, happy workers are more productive.
A recent study led by academics Andrew Oswald, Eugenio Proto and Daniel Sgroi of the Department of Economics at the University of Warwick found that happy workers were 12 per cent more productive, while unhappy workers were 10 per cent less productive. The research was based on four different experiments with more than 700 participants.

Data from 1994 to 2009 covering the 100 best companies to work for in the United States, as tracked by Fortune magazine, also shows that these top employers outperformed their peer group by 2.3 per cent annually. According to London Business School professor Alex Edmans, this is not a correlation, but a direct causation between happier companies and shareholder returns.

US Internet giant Google/Alphabet - the most valuable company in the world - is regarded as the pioneer in employee happiness. It has been on Fortune's list of top employers for 10 years, with 2016 being its seventh time at No 1.

Happy workers even make better sandwiches. British sandwich chain Pret a Manger, which takes its employees' wellbeing very seriously, attributed its impressive 16 per cent annual sales growth in 2014 largely to its happy workforce. Its staff are even given a special bonus for being happy during work.


'Under happy' workers here

Singapore, however, is not known to have happy workers. In the 2015 World Happiness Report by the United Nations Sustainable Development Solutions Network, Singapore was ranked the 24th happiest of 158 countries.

A workplace happiness survey, conducted by the Singapore Human Resources Institute and consulting firm Align Group in 2014, revealed that employees in Singapore are "under happy", with a score of 59 out of 100 on the overall workplace happiness index.

That could be the reason for the country's lacklustre productivity. In the 2015 World Competitiveness Yearbook by Swiss business school IMD, Singapore maintained its position as the third most competitive economy in the world - but was ranked 12th for "productivity and efficiency".

To boost productivity, Singapore could strive to create a happier workforce with the tripartite partners (employers, workers, and government) here cooperating with one another closely and continuously.

First, employers are at the centre of creating a happier workforce. They could follow a simple "EMOTION" approach - namely Employee engagement, Maximising satisfaction, Optimising culture, Trust building, Individualisation, Opportunity creation, and Non-monetary incentives.

Stanford University professor Jeffrey Pfeffer found that workplaces that offer interesting and meaningful work where employees had some autonomy and discretion not only produced happier workers but were also more profitable than workplaces that treated employees as cogs in a production machine. In particular, micro- managing should be discouraged.

In Google, its employees (called "Googlers") are given competitive salaries, free ice cream and healthy snacks, free lifts to work, and the opportunity to spend 20 per cent of their office time on non-work projects of "passion".

Expedia, an online travel company, is famous for its focus on "work-life balance", and provides perks such as free breakfast once a month, and travel and health benefits.


Follow a 'HAPPY' recipe

Other practical measures adopted by top companies include flexible hours, training opportunities, challenging assignments and clear career progression, so that employees feel stretched professionally and valued personally.

Second, workers play a key role in their own happiness - since, in essence, one's personal perception of his or her job affects satisfaction. Everyone can follow a "HAPPY" recipe - namely contributing to Harmony in the workplace, working with Appreciation, staying Positive, pursuing your Passion, and focusing on improving Yourself instead of competing with others.

Third, in the long run, the Singapore government could consider measuring happiness in the workplace and society, as only "what gets measured gets managed", in the words of Peter Drucker, the guru of modern management.

The United Kingdom could be a good role model. In the UK, the All-Party Parliamentary Group on Wellbeing Economics was formed in 2009 to promote wellbeing as an important government goal, encourage the adoption of wellbeing indicators as complementary measures of progress to GDP, and promote policies designed to enhance wellbeing.

In 2010, the National Wellbeing Programme was launched, and the UK Office for National Statistics has published annual "official" wellbeing and happiness statistics since the financial year ending 2012. Since then, reported personal wellbeing in the UK has been improving, and the year- on-year differences are statistically significant.

In October 2014, the What Works Centre for Wellbeing was set up to promote greater understanding of what government, business, communities and individuals can do to improve wellbeing by providing the best available evidence on what works and what doesn't to improve wellbeing. For instance, the centre has released personal wellbeing results by occupation which are being used to develop a new careers application for young people.

A similar mechanism could be created in Singapore. Following the National Workplace Happiness Survey, Singapore should consider officially collecting and publishing annual national workforce wellbeing statistics, measuring not only the overall sense of satisfaction with work but also the sense of fulfilment across different types of occupation.


Pursuit of happiness

To effectively use workforce wellbeing data, it is necessary to organise public dialogues and build stakeholder engagement so as to communicate the likely impact of real policy initiatives on workplace happiness and to help employers create the conditions for employees to work happily.

After all, the Singapore national pledge sees citizens committing "to achieve happiness, prosperity and progress" for the nation. Since Independence 50 years ago, Singapore has enjoyed a tremendous increase in material prosperity.

Perhaps it's time for the earnest pursuit of happiness, even if it is harder to quantify. In return, a happier society will better enable Singapore to achieve higher productivity.