Many companies are under the false notion that it costs too much to have happy employees. They imagine the big beautiful budgets of companies like Apple and Google and think it's impossible. While it would be nice to offer fun perks and huge bonuses, that's simply not necessary to create a fabulous company culture.

What does cost too much though is having a toxic company culture. Take a look:

Conservative annual estimations for an employee with an annual salary of $40,000

Estimated Cost of ONE Unhappy Employee:

• Loss of productivity salary cost about $46/week (2 hours week) $2,400
• 10% less productive than average (output loss) $8,000
• Brain drain on fellow employees (5 emps/1 hour/week@$20/hour) $5,200
• Turnover - conservative 50% of Salary $20,000
• Get sick more often (productivity loss, increased cost of healthcare) $1,000
• More lawsuits $2,000
  
  Total cost of one unhappy employee to the bottom-line not including their salary $38,600

Estimated Cost of TEN Unhappy Employees - $386,000

Estimated Value of ONE Happy Employee:

• More productive, efficient - 12% more than average (output gain) $9,600
  
• Happier Coworkers (affect 5) $5,200
  
• Increase Customer Satisfaction (14% better customer service) which leads to Increased Revenue Growth $2,500
  
• Absent 28.4% less than unhappy $619
  
• Fewer Mistakes - 26% Fewer $2,000
  
• Better Employment Brand - Easier Recruitment $1,000
  
  Total Contribution of one happy employee to the bottom-line $20,919

Estimated Value of TEN Happy Employees $209,190

Value of ONE $40,000/salary/yr Unhappy Employee Becoming a Happy Employee $59,519 or in essence a multiple of 1.5Xs their salary

That's $230/work day/employee!!!

1) The productivity loss of one unhappy employee who makes $65,000 is $75 per week or $3900 per year. Source: Thomas Wright, Jon Wefald Leadership Chair in Business Administration and professor of management at K-State

2) Happy workers are 12% more productive than average while unhappy workers are 10% less productive than average (for a total spread of 22%!) Source: Andrew Oswald, a professor of economics at Warwick Business School

3) Happy workers are absent 28.4 percent (or 12.3 days) less for an estimated annual value of $619 per happy employee. Source: Kathryn Rost, PhD, of the University of Colorado Health Sciences Center

4) Watson Wyatt reports that total turnover costs including hard dollars and lost productivity are approximately 48% – 61% of salary. Source: Watson Wyatt Insider September 2005, VOL. 15, NO.9,

5) (Example of Brain Drain) Average employee spends 2.8 hours a day worrying about job concerns such as company layoffs or losing his or her job. Source: Lynn Taylor Consulting, Survey of 1,000 adult workers released in March 2009

6) Companies with employees who were highly engaged beat the average revenue growth in their business sector by one percent while companies with low engagement fell behind their business sector’s revenue growth by an average of two percent. Source: Towers Perrin Talent Report Understanding What Drives Employee Engagement (2003)

7) 97% of the MBAs said they were willing to forgo financial benefits to work for an organization with a better reputation for corporate social responsibility and ethics. The study defined exactly how much the MBAs would forgo: 14% of salary. Source: A 2003 Stanford Graduate School of Business study of almost one thousand graduating MBAs at the nation’s top ten schools, conducted by professors David Montgomery and Catherine Ramus

8) Employees in highly participative work climates provided 14% better customer service, committed 26% fewer clinical errors, demonstrated 79% lower burnout, and felt 61% lower likelihood of leaving the organization than employees in more authoritarian work climates. Source: Angermeier, Dunford, Boss & Boss; Journal of Healthcare Management – March 2009

9) 40 to 80 percent of customer satisfaction and loyalty is determined by the customer-employee relationship. Source: White paper by the Corporate Leadership Council

10) A one-unit increase in employee satisfaction led to a 0.31-unit increase in customer satisfaction. In turn, a one-unit increase in customer satisfaction created a 0.28-unit improvement in financial performance. Source: Forum for People Performance Management & Measurement, Northwestern University

11) Sears analyzed data from 800 stores and found that a 5 percent increase in employee satisfaction drove a 1.3 percent increase in customer satisfaction, in turn bringing a 0.5 percent increase in revenue growth. Source: Study published in the Harvard Business Review