The Economist - USA (2019-11-02)

58 Business The EconomistNovember 2nd 2019

2

Bartleby Whistlewhileyouwork

Economist.com/blogs/bartleby

T

hereis anoldjokeabouta new

arrivalinHell,whoisgiventhe

choicebySatanoftwodifferentworking

environments.Inthefirst,frazzled

workersshovelhugepilesofcoalintoa

fieryfurnace.Inthesecond,a groupof

workersstand,waist-deepinsewage,

sippingcupsoftea.Thecondemnedman

opts,onbalance,forthesecondroom.As

soonasthedoorcloses,theforeman

shouts“Rightlads,teabreakover.Time

tostandonyourheadsagain.”

Terribleworkingconditionshavea

longtradition.Earlyindustrywas

markedbyitsdirty,dangerousfactories

(dark,satanicmills).Intheearly20th

centuryworkerswereforcedintodull,

repetitivetasksbytheneedsofthepro-

ductionline.However,ina service-based

economy,it makessensethatfocusing

onworkermoralemightbea muchmore

fruitfulapproach.

Provingthethesisismoredifficult.

Butthatistheaimofa newstudy*which

examinestherelationshipbetween

happinessandproductivityofworkersat

BritishTelecom.Threeacademics—

ClementBelletofErasmusUniversity,

Rotterdam,Jan-EmmanueldeNeveof

theSaïdBusinessSchool,Oxford,and

GeorgeWardoftheMassachusettsIn-

stituteofTechnology—surveyed1,800

salesworkersat11 Britishcallcentres.All

eachemployeehadtodowasclickona

simpleemojieachweektoindicatetheir

levelofhappiness.Thoseworkerswere

chargedwithsellingcustomersbroad-

band,telephoneandtelevisiondeals.In

totaltheauthorscollectedadequate

responsesfrom1,161peopleovera six-

monthperiod.

Theresultswerestriking.Workers

made13%moresalesinweekswhenthey

werehappythanwhentheywereunhap-

py.Thiswasnotbecausetheywerework-

inglongerhours;inhappyweeks,they

mademorecallsperhourandweremore

efficientatconvertingthosecallsinto

sales.Thetrickypart,however,isdeter-

miningthedirectionofcausation.Work-

ersmaybehappierwhentheyareselling

morebecausetheyanticipatea bigger

bonus,orbecausesuccessfulsalespitches

arelessstressfultomakethanunsuccess-

fulones.

Theacademicstriedaningeniousway

togetroundthiscausationproblemby

examininga veryBritishissue—theweath-

er.Workersturnedouttobelesshappyon

dayswhentheweatherintheirlocalarea

wasbadandthisunhappinessconverted

intolowersales.Sincetheyweremaking

nationalcalls,notlocalones,it isunlikely

thatcustomerunhappinesswiththe

weatherwasdrivingthesalesnumbers.So

it wasworkermooddrivingsales,notthe

otherwayround.

Evenif thisreasoningprovestobe

correct,businessesmaynotfindit of

comfort.Shortofsitingalltheircallcen-

tresinHawaii,companiescannotcontrol

theweatherconditionstheirworkersface.

Theacademicspointoutthat“whatwe

arenotabletodo,givenourdataand

setting,isadjudicateastowhetherin-

vestinginschemestoenhanceemployee

happinessmakesgoodbusinesssense”.

It ispossiblethatthecostsofsuch

schemesmightoutweighanygainsin

productivity.

Moreresearchisclearlyneeded.But

thereisevidencethathappierworkers

aregoodnewsforshareholders,aswell

asproductivity.AnalystsatboaMerrill

LynchGlobalResearch studiedthestocks

offirmsratedonGlassdoor,a website

thatallowsemployeestoratethecompa-

niestheyworkfor.Thosewiththehigh-

estratingsoutperformedthosewiththe

lowestbynearlyfivepercentagepointsa

yearbetween 2013 and2019.Theanalysts

alsousedsoftwarethatpickedoverthe

textofemployeereviewsandfoundthat

incorporatingthisapproachimproved

therisk-rewardtrade-off(asmeasuredby

theSharperatio)ofthestrategy.

Theanalystshavenowappliedthe

sameapproachtopickingstocksbased

onparticularindustries.Again,the

sectorswhereworkersgavethebest

reviewsonGlassdoorbetween 2013 and

2019 easilyoutperformedthosewhere

employeesgavea thumbsdown.

Noneofthisisunequivocalproof.The

historyofequityinvestingislittered

withstrategiesthatworkedwellwhen

back-testedonlytodisintegratewhen

appliedintherealworld.Butatthevery

least,it suggeststhatfirmsshouldcon-

siderthemeritsofa contentedwork-

force.Andthatmightmeangivingthem

harpsandambrosia,ratherthanHell.

Researchsuggestshappyemployeesaregoodforfirmsandinvestors

.............................................................

* “Does Employee Happiness Have an Impact on

Productivity?”, Saïd Business School Working

Paper 2019-13

Two things explain the firm’s resur-

gence. One is a better product. In 2012 amd

rehired Jim Keller, a well-regarded chip de-

signer who had been at Apple. amdhad

long been competing on price—its chips

were slower than Intel’s but much cheaper.

Mr Keller’s “Zen” chips, unveiled in 2017,

are still cheap. But they are now as zippy as

Intel’s, or even zippier: amd’s top-end serv-

er chip, for instance, is faster than its Intel

counterpart in many tasks, and costs half

as much. Zen chips have won a string of

contracts with Microsoft and Sony (for new

games consoles), Google (data centres) and

Cray (supercomputers), among others.

The second reason is that, while amd

has improved, Intel has stumbled. The firm

makes its own chips. Its latest and greatest

manufacturing process, which should

have delivered a big performance boost, is

years late, leaving the firm to rehash exist-

ing designs. amd contracts most of its

manufacturing to the Taiwan Semiconduc-

tor Manufacturing Company, which has

now caught up with Intel’s technology.

Can amd’s good fortune last? Intel even-

tually put paid to similarly competitive

spells at the turn of the century and in the

mid-2000s. It is trying again. In 2018 it

hired Mr Keller, this time from Tesla (he

had left amdin 2015). It plans to launch an

advanced new manufacturing process in

2021. A planned move into gpus could
      squeeze amdfrom another direction.
      For now, amd’s resurgence is good news
      for consumers, it departments, cloud-
      computing firms and anybody who uses
      software. Like any good monopolist, Intel
      charges a steep price for its products—un-
      less amdis doing well. Sure enough, Intel’s
      newest set of desktop chips, due in Novem-
      ber, are some of its thriftiest in years. 7