The Returns on an Investment in Positive Psychology

Guest Blogger Bio:

Alexa Thompson is a writer for an online psychology resource and has written about how to approach earning a psychology degree, something that is increasingly useful in the modern corporate world. In today’s post, Alexa discusses the history behind positive psychology and the returns on investment that companies can gain by taking an active interest in their employees physical, emotional and mental well-being. Although this post lists the benefits of investing in employee well-being, including education, Living in Learning details the steps to reaching employee engagement, a huge contributor to happiness in the workplace.

Alexa Thompson –


The Returns on an Investment in Positive Psychology

Employers and employees alike mourned Harry Levinson when he passed away in June 2012. This innovator’s decades of research regarding the link between happy, motivated workers and prosperous companies wrought major changes to the American workplace. And as a result of his life’s work, positive psychology is standard practice throughout the modern corporate world.

Prior to Levinson, attitudes about workplace psychology were vastly different. In fact, from the outset of the Industrial Revolution through the end of the 19th century, employee conditions were of little consequence to business leaders. Company profit was the chief concern, and workers were seen as tools of productivity rather than human beings; considering the fact that slaves and indentured servants performed most labor prior to the Industrial Revolution, this attitude was somewhat naturally progressive.

Nonetheless, many scholars of the 19th and early 20th century postulated on the plight of workers within this inherently negative environment. Karl Marx, for instance, discussed the effects of extricating happiness and creative stimulation from labor in his ‘theory of alienation.’ Frederick Taylor noted that some individuals are better suited for particular workplace tasks than others – a theory known as ‘scientific management’ that was instrumental in the popularization of factory assembly lines. During the Hawthorne Studies of the 1920s and 1930s, Elton Mayo noted the attitudinal differences between people who work alone and those who work in groups. Even the author, Franz Kafka, who was employed for years by the Worker’s Accident Insurance Institute for the Kingdom of Bohemia, wrote many works about the psychology of workers who are unable to find any value in their labors.

By the time Levinson began developing his ideas in the 1950s, most company leaders understood that employee happiness was vital to financial success. But he capitalized on this simple notion even further by examining the factors that contributed to employee happiness in the first place. Companies should act as learning institutions, he posited in The Exceptional Executive (1968), and employers should teach their subordinates, rather than treat them as underlings. Levinson believed that a psychological contract existed between employers and employees – and violation of this contract often led to workers who were depressed and unmotivated. While these ideas are somewhat standard in today’s corporate climate, they were nothing short of revolutionary when he introduced them in the 50’s and 60’s.

The most common company employee well-being investment is health insurance – but many experts warn that benefits alone will not guarantee a good return. In recent years, several leading companies have exemplified excellent investiture in employee wellness by taking a broad, all-encompassing approach.

Johnson & Johnson, for example, saved $250 million in 2010 by investing in employee well being – that is roughly $2.71 saved for every dollar spent on an employee. J & J’s investment program included not only health insurance, but also wellness workshops and seminars, stress coaching, crisis support and incentives to quit smoking and lose weight. Unilever, employing a similar tactic, saved $5.44 for every $1.55 it spent on its employees last year.

Another common employee investment opportunity for companies is a wellness benefits program. By putting money into the physical, emotional and mental health of one’s workforce, company leaders are not only strengthening the employer-employee relationship but also, according to a study by Principal Financial Group, earning a 3-to-1 return on their investment. Companies that offer wellness benefits include many health care providers, medical centers and large firms like Humana, American Traffic Solutions and Constellation Brands.

Programs like this fall perfectly in line with the work of Harry Levinson, one of the first men to recognize the importance of fostering good physical and mental health among one’s employees. His advice to employers 60 years ago still stands today: if you invest in the well-being of your workers, your entire organization reaps the benefits.