A recent study indicates that happy workers are good for profits. The challenge in this study is that successful companies may result in happier employees. Or, is it the other way around, do happy employees lead to successful companies? The study looked at the annual list of best companies to work for. These lists are published in 14 different countries. The study looked at the effect of such rankings on stock value. Stock value increases for companies after they are listed on the list of best companies to work for. See CBS News report.
So, finds the study, companies do benefit to some extent from investing in worker happiness. The study is contained in a paper, "Employee Satisfaction Labor Market Flexibility, and Stock Returns Around the World," by Alex Edmans, Lucius Li, and Chendi Zhang. See summary of the paper here. Mr. Edmans is currently teaching at the London School of Business.