The key to productivity in the workplace could be something other than financial incentives, according to studies in America.

Dr Matthew Lieberman, professor of psychology, psychiatry and bio-behavioural sciences at UCLA, believes that the key ingredient is, in fact, happiness.

He reported that countless employees are unhappy and are saying that they only work for money, yet many would swap it for a better boss and a healthier work environment.

For years, rewarding employees with higher contracts and bonuses has been a sure-fire way to drive productivity. However, it now seems that may no longer be the case.

Dr Lieberman claims that an understanding of what drives people in general is required, and that it must then be transferred to the workplace.

Links to how our brain works

He points to a social pain, much akin to physical pain, that means people do not perform as well as their brain reacts in a similar fashion to how it deals with real pain.

“We can understand why someone who just broke their leg would score lower – how could they possibly focus when experiencing intense pain?” he explained.

“Yet, the same is true of social injuries because all pain grabs our attention leaving less attention for other important things.”

Praise from others, fair treatment and the opportunity to help others can improve happiness and thus productivity, he claims.

A workplace that stimulates workers and is socially rewarding is therefore important to ensure that all workers reach their potential.

Therefore, praising employees might be just as productive as giving them a raise – except it will cost less to do so.

Dr Lieberman pointed to several studies which found that employee productivity leapt up when they were able to help others.

Of course, everyone will not feel entirely the same as those people within these studies, but it does suggest that happiness at work can go a very long way.